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

To: lkj who wrote (25744)	5/15/1999 1:55:00 AM
From: Tae Spam Kim	Read Replies (1) \| Respond to of 77400

No company can continue this torrid earnings growth and revenue growth forever. Cough, cough, and then again there's Microsoft.

To: lkj who wrote (25744)	5/15/1999 8:17:00 AM
From: Zoltan!	Respond to of 77400

I agree that LU is overpriced given the eventuality. You must understand where LU's recent profit gains have come from and that they have been considerably augmented by cutting overhead (and pension finagling) - remember LU is an old and inefficient operation compared with Cisco. Analysts know that LU cannot keep pumping earnings by cutting overhead and gains in its pension accounts - the current estimate is about two years and analysts know that. LU's stable of commodity, old line and low margin products are very vulnerable to further profit erosion. I suggest that you read the report that DLJ provided its private clients earlier this year concerning the relative strengths of Cisco and LU and you'll understand why they chose Cisco to easily outperform LU and why Cisco commands and deserves a much higher P/E.

To: lkj who wrote (25744)	5/15/1999 10:44:00 AM
From: Howard Feinstein	Read Replies (2) \| Respond to of 77400

Sometimes I just don't understand the mentality of the people on these tech threads. Most of the people who voice opinions here are very knowledgeable and technically very astute. Why do the discussions have to get into who's better LU or CSCO. They are 2 terrific companies, both growing tremendously, both making money, and both geared to excel into the next decade. Does it make a difference who's in first place? Is there such a thing as "The Winner" here? Does anybody truly care whose in first place? C'mon now children! Two outstanding companies, both growing rapidly, both making money for their shareholders, and both winners! Is either side ever going to prove they are better? WHO CARES??? I own both, made a great deal of money on both, and will continue to own both. Making money is what this is all about! I dare either LU or CSCO shareholders to prove how owning one company or the other will not benefit the shareholders! GET REAL GUYS!..........One Very Happy CSCO/LU Shareholder, Howie

To: lkj who wrote (25744)	5/15/1999 11:19:00 AM
From: jach	Read Replies (1) \| Respond to of 77400

CISCO's last two to three years historical price based on earnings is around 60. Based on this CSCO stock realistic value at this point is around 70$ only, not 100+. Look for CSCO to correct big time when the mkt turns south. Also, summer is coming and tech stocks typically turns downward in summer. Also, the estimate for next qtr got bumped up to the 40c+ range which will be tough to beat. If CSCO misses one qtr, it will be cut 30-40% in one day. All imo.

To: lkj who wrote (25744)	5/15/1999 11:23:00 PM
From: Jacob Snyder	Respond to of 77400

repost from Oil thread: (it's OT): Below is the latest market commentary of FORBES columnist Martin Sosnoff. He has been EXTREMELY ACCURATE for many years and his record is as good as anybody's (well almost). Note that his outlook now is very different than Wallenchuck's. Expects the Dow to be lower in 2005 than it is today because he sees earnings at or near peak levels for most sectors whirl interest rates are headed higher. Of course OS is very different. Far from being near a peak. earnings are still at trough levels. So the OSX can go back to its old high if oil prices stay up even if the overall market goes nowhere. But the OS outlook is the exception, not the rule. Market Trends Forbes Executive Compensation Database Dow 10,000—in 2005 By Martin Sosnoff A COUPLE OF YEARS AGO, I wrote that Dow 10,000 by the year 2000 was a shoo-in because of rising earnings, low interest rates and low inflation (Mar. 24, 1997). This potent combo is still with us. But I'm not about to ratchet up my prediction, because now the market is priced for perfection in an imperfect world. The assault on Mount Dow's summit—yes, it's a summit or close to one—was instructive. Financial services stocks like Citigroup and American Express broke out, and then a rebound in depressed oil properties like Exxon and Chevron put us over the top. Basic materials plays like DuPont and Union Carbide were pulled along, so long-suffering value players may get their day in the sun. But growthy nondurables like Coca-Cola, McDonald's and Procter & Gamble remain wishy-washy, and formerly unassailable growth stocks like Microsoft, Wal-Mart and Pfizer are under attack. Brokerage stocks are at 20 times earnings—more than 3 times book value—and inherently volatile. They've rarely sold higher. (The exception is Charles Schwab, trading at an unspeakable Internet valuation.) Who will be left to buy General Electric at 30 times next year's expected earnings, Wal-Mart at 40 times or Cisco Systems at 60 times? Even the cash flow into mutual funds—every bull's favorite fallback—has been unimpressive recently. More broadly, the tortuous verbiage of Internet analysts rings hollow. Yes, the industry is in its take-off stage. But capitalizing Priceline.com at $17 billion in such a low-margin auction business is a flight from reality. Yahoo may be the leading Internet portal, but it trades at 100 times predicted revenues, not earnings. Analysts rationalize this anomaly by saying Yahoo could achieve 90% gross income margins à la Microsoft. You want that bet? Take it. It's no coincidence that all big deals for Internet properties—At Home's buyout of Excite; Barry Diller's bid for Lycos—are exchanges of paper. Nobody would part with hard cash for these properties. Based on profit growth, the market is 20% overvalued-and don't let fancy balance sheets snow you. As for the economy, corporate earnings look healthy this year, but it's hard to imagine the even-lower inflation and interest rates that would help valuations. If OPEC sticks together, oil at $16 to $17 per barrel will add 20 basis points to the Consumer Price Index. You can make a case that the Federal Reserve will tighten credit around midyear if annualized GDP growth exceeds its projected 2.5% to 3%. An overpessimistic Fed misread the economy when it lowered rates back in October, and board members aren't happy about it. Just read their notes. Academics put the long-term trend in corporate profit growth at no more than 4% per year, not the 7% needed for dividend discount models to justify current stock prices. The S&P is 20% overvalued using this admittedly dry analysis. And don't let fancy corporate balance sheets snow you. If you account correctly for stock buybacks made with borrowed money (even IBM does it) and option grants that obscure salary expenses, you get down to 4% profit real fast unless the economy zooms. As for those resurgent value stocks, profit margins for many industrials are near their peak, not at depressed levels. It's true for General Motors, Dow Chemical, Caterpillar and conglomerates like DuPont and GE. The only properties in the Dow Jones industrial index with depressed earnings are Boeing, Union Carbide, International Paper and Eastman Kodak. Where is the leverage to propel the Dow's earnings? The Dow pierced 1000 back in 1972 during a comparable frothy interlude. Then came the horrendous recession of 1973-74 (OPEC induced). The Dow touched down at 608 in 1974, 40% below its peak and yielding more than 5%, and then took eight years to climb above 1972 heights. In the meantime, commercial real estate values fell off the page and the country suffered vicious inflation in everything but stocks and real estate. The Dow today has outgunned even 1972's valuation extremes. When I say 10,000 in 2005, I'm not suggesting that you abandon the market. Be very selective, picking up the strongest companies that are relatively underpriced. IBM (even after its recent run-up), Cigna Corp. and Chancellor Media Corp. fit that bill now. Let's give ourselves some room for wars, economic cycles, Third World debt and our own stretched equity valuations. Enough is enough. Martin Sosnoff is chief investment officer of Atalanta/Sosnoff Capital in New York and author of Silent Investor, Silent Loser. E-mail: mts@atlantasosnoff.com \| back to top \| Read more: By Martin Sosnoff Investment Columnists Market Trends From May 17, 1999 Issue May 17, 1999