Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Pancho Villa who wrote (9386)	5/31/1998 1:13:00 PM
From: Greg Jung	Read Replies (2) \| Respond to of 18691

I don't think a Cisco short will take you very far this year. To get the current valuation of Cisco you need, at PEG=1, a 40% earnings growth rate. This is the rate that Cisco has achieved in the recent past and so using PEG=1 may not be too generous. Warnings such as those you quoted in the 10-Q come with all 10-Qs, of course. Take a company like Ascend, however, with projected growth in the ???%% Did you say 45%? Are we laughing yet? If it were still Cascade Communications then maybe I could buy 45%. Cisco Systems Earnings dilution worksheet Assume: 40% Total earnings yearly growth Assume: 4.2% dilution/year Results in: 34.4 Forward PE Multiplier #SHARES $Inc. EPS Backtrend earnings 4/26/97 1032.5 352.3 0.34 352.3 7/26/97 1043.2 383.2 0.37 PEG=1 $$ Cash 382.2 10/25/97 1056.6 415.7 0.39 Value (2) per share 420.4 1/24/98 1062.5 457.3 0.43 68.2 1.00 (3) 444.2 4/25/98 1076.3 483.2 0.45 73.4 (1) 1.45 7/25/98 1087.4 525.6 0.48 79.0 1.93 10/24/98 1098.7 571.7 0.52 85.1 2.45 1/23/99 1110.0 621.9 0.56 91.6 3.01 4/24/99 1121.5 676.5 0.60 98.6 3.61 7/24/99 1133.1 735.8 0.65 106.2 4.26 10/23/99 1144.8 800.4 0.70 114.3 4.95 1/22/00 1156.6 870.7 0.75 123.1 5.70 4/22/00 1168.6 947.1 0.81 132.5 6.51 7/22/00 1180.7 1030.2 0.87 142.6 7.38 10/21/00 1192.9 1120.6 0.94 1/20/01 1205.2 1218.9 1.01 4/21/01 1217.7 1325.9 1.09 7/21/01 1230.3 1442.3 1.17 Notes: 1. Previous four actual earnings are listed. Compares well to back-trended (shown in seperate column). So well, in fact, that careful calibration of income statements is presumed to take place. 2. "full value" is calculated as (Forward PE factor) X (forward earnings) / (anticipated #shares)" 3. Cash is accrued from earnings, with 4% annual after tax interest" --------------------------------