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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: jach who wrote (23635)	3/14/1999 1:50:00 PM
From: limtex	Read Replies (2) \| Respond to of 77398

jach OK you win you hooked another schmuck to reply to you. 1. The World economy is going to expand from here. Lets assume that Japan starts to recover and recover to a growth track. Now even if the World economy carried on as it dd last year CSCO and of course LU would have carried on growing their revenues. 2. Over the next few years the volume of data traffic is going to render the current level of voice traffic being carried immaterial in size. That trend would have existed strongly anyway but it is being stregnthened every day with the prospect of a whole raft of new products like G3, satellite and FBBW, eb TV and all sorts of other goodies that are going to be great fun to use at work and at home ( greater convergence between the two will also boost this traffic). 3. There more the goodies the greater the demand for them. Here in Houston I have been trying to get anything to boost the 28.8 I get out of a SW Bell phone. Can't get it. Time Warner Cable have the building sown up and they just don't have Road Runner here yet and we can't get anyone else in the building. The manager gets 'annoyed' when I mention replacing Time Warner. SBC says they may have ADSL sometime after May. The point is that in our building we'd love to have Broad Band and when we get it, which sooner or late we will, the volume of traffic into here will go up by several orders of magnitude and we are one appartment block out of tens of thousands. Anyway as the Braod Band access increase so will the requirement to switch it. You can guess how much but a lot. 4. Margins will be maintained brand power and IPR development ( organic and by acquisition). Now take all that and put it in a spreadsheet for CSCO revenues and see where they land up five years from now. L

To: jach who wrote (23635)	3/14/1999 9:52:00 PM
From: The Phoenix	Respond to of 77398

First Jach let's be fair. Let's first normalize LU+NT. One share of each (which is what you would need to earn $5.40) would cost you $160. So, if you normalized earnings you're comparing $1.80 (est. earnings for cisco) versus $3.37 for NT+LU...no doubt a significant premium. Now using the same data your using you should look at projected earnings growth for the next 5 years...and historical earnings. cisco is far more consistent and is projected to have more growth going forward. Historical Cisco Jan 98 - .28 Apr 98 - .29 Jul 98 - .31 Oct 98 - .33 Jan 99 - .36 5 Year earnings growth projections: 29.3% (above total sector) NT Dec 97 - .74 Mar 98 - .27 Jun 98 - .41 Sep 98 - .42 Dec 98 - .72 5 year earnings growth projections: 19.4% (below total sector) LU Dec 97 - .86 Mar 98 - .14 Jun 98 - .32 Sep 98 - .45 Dec 98 - 1.05 5 year earnings growth projections: 21.9% (below total sector). Jach, I will say that on the surface - looking at historical earnings does give one pause. However, earnings for LU and NT have proved lumpy and therefore unpredicatable. The market doesn't like that. Compare this with Cisco's machine-like march and expectations to continue to dominate the market...demonstrated by earnings that are projected to exceed the sector. So, if you're going to use pure numbers to compare cisco...you'll have a good case, but not a lock. Once you add in Cisco's dominant channel, market presence, sales force , and marketing prowise I think you'll have to agree that Cisco is worth investing in....as are LU and NT. If you're suggesting that we all sell our Cisco and put out money in LU and NT...well I think you'll have to look at your own numbers and think better of it. You have to hold some Cisco. At least I'm going to. OG