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| Author | Topic: Cisco Systems (CSCO) |
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dude |
posted 02-15-2000 12:33 PM
 
> they expect to ... invest up to 38-39% of its revenues in the coming year. What do you mean by "invest"? If you're referring to R&D, they've been spending about 13% of revenues on R&D (or 14% if you include purchased in-process R&D), and I'd expect this number to remain fairly constant as it has in the past. Or maybe you're talking about acquisitions? |
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Machiavelli |
posted 02-15-2000 10:34 AM
I finally got a chance to listen to the conference call for their earnings report, and these are the things I like especially (and that haven't been said here yet): - John Chambers and Co. clearly have a solid handle on how to run the business. - Cisco sees a vast number of "enormous" opportunities that lie ahead in its industry. Based on these opportunities to expand, they expect to grow its spending rate (slightly faster than sales) and invest up to 38-39% of its revenues in the coming year. I like any company that invests in the future, and don't mind the levels. Especially with this management team. - The growth rate for their routers and switches (the main business) was much slower than that of its access and other products. However, this is a great sign for the company's future as it shows that Cisco is expanding successfully into new areas of the networking business. |
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MaxPower |
posted 02-11-2000 12:50 PM
Here's a stat for you: Cisco has been a publicly traded company for 40 quarters. This recent earnings report marked the 40th consecutive time that the company has matched or exceeded the expectations of the Wise. That's solid leadership right there. |
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smario |
posted 02-10-2000 04:58 PM
I've been a very happy Cisco shareholder (got in during the past few months), but like dude pointed out, the returns are coming much faster than I expected. Obviously this can't keep up, but I'm just wondering if Cisco will reach a certain level, stay there for awhile, move up again, etc. Or if they will start to bounce up and down through momentum investing. If it's the latter, what might be a good time to take some profits, and then wait for it to drop down to another level? Or is there never a good time to take profits with this company (ie won't ever have a sharp downturn)? Sure it would be like crying about finding gold instead of platinum (is either really that bad?), but it's still worth discussing, I think. |
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JHirsch |
posted 02-09-2000 04:09 PM
dude, If you think you can find returns of 25% you'd be silly to hold on to a stock which you think will gain 18%. Here's an article about cisco... |
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dude |
posted 02-09-2000 11:10 AM
> I don't know dude, I still view this stock as a solid investment for the next 5 to 10 years. At that point, will we even remember the level it was at now? Mach, I partially agree with you, which is why I've held it this long, even as it continued to go up, and why I've only sold half my position. However, no matter how great a company is, it's possible to pay too much. CSCO's P/E is at an all-time high, but one could argue that it should be falling as the law of big numbers will interfere with its ability to continue its rapid growth. I see CSCO returning 18% a year over the next ten years. I see MSFT returning 15% a year over the next ten years. So why do I think MSFT is the better buy? Because it's far less risky. Compare how much CSCO spends on acquisitions every year to avoid new competitive threats to how much MSFT spends on the same, and you'll see what I mean. Despite the frothiness of the market, I think I can find stocks that will return 25% a year with less risk, and this is why I've sold part of my position. |
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dude |
posted 02-09-2000 10:33 AM
> If they consistently try to keep their stock low through splits, aren't they trying to guard against such a problem? In the short run, splitting may prop up a stock, because in the short run the market is a voting machine. In the long run, splitting has no effect on a stock, because in the long run the market is a weighing machine. Which is cheaper, $2 for a dozen eggs or $1 for a half dozen? |
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gatsby |
posted 02-09-2000 10:09 AM
This is the ninth time that Cisco has announced a split, and they've always done it when their stock has reached this kind of level. Here's my question - many people have been saying that Cisco will be at the top of the list of companies hurt by a huge market downtown or problem within the tech industry. If their stock remained at these levels (and even higher), than I could see it. But if they consistently try to keep their stock low through splits, aren't they trying to guard against such a problem? I understand that that the P/E number stays the same and a split doesn't really mean much in theory, but in actuality, isn't a lower price safer for a company like Cisco? |
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InvestorGuide Daily Administrator |
posted 02-09-2000 12:03 AM
Cisco Systems beat analyst forecasts again, reporting that fiscal second-quarter profit rose 49%. The company also announced a 2-for-1 stock split. http://www.msnbc.com/news/367527.asp |
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Machiavelli |
posted 02-08-2000 05:20 PM
I don't know dude, I still view this stock as a solid investment for the next 5 to 10 years. At that point, will we even remember the level it was at now? Though obviously your investing time frame may be different from mine. And MSFT as the best company in the world is certainly debatable... Anyway, Cisco blew away the quarter again. Profits rose 49%, and they reported sales of $4.35 billion, up 53 percent from $2.85 billion in the year-ago period. Earnings are a reported pro forma 25 cents a share, excluding certain items. Currently up over 6 in after-hours trading. |
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dude |
posted 02-08-2000 12:40 PM
Well, I finally pulled the trigger on this one. When I bought CSCO back in 1995 I was confident that it would be a ten-bagger, but I expected it to take twenty years. The extra zero arrived well ahead of schedule, and I've decided to sell half my position. I consider this the second-best company in the world (from an investor's standpoint, at least), right behind Microsoft. But the stock has just gone up too much (the forward P/E is above 100 and the market cap is approaching 80% of Microsoft's). I'll probably sell the other half of my position if it rises another 30%. |
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Machiavelli |
posted 02-07-2000 03:35 PM
For what it's worth, Warburg Dillon Read raised its price target on Cisco to 140 from 100. You may not give much credibility to such targets, but as an investor, you do need to recognize them and know when they occur. |
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banka |
posted 01-21-2000 01:31 PM
Here's the press release, which partially answers your question: http://www.cisco.com/warp/public/146/pressroom/2000/jan00/corp_011900.htm It's not a complete answer, but perhaps that's intentional - why tip your hand to the competition? In any case, I don't feel the need to understand the logic of the deal. I'm a long-term CSCO shareholder, and in the beginning I tried to understand every deal they make, but Chambers gradually earned my trust as a dealmaker, and now I'm confident that every deal he does makes sense. |
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Machiavelli |
posted 01-20-2000 03:27 PM
All I know are these two facts: Altiga makes remote access technology for VPNs, and Compatible makes VPN technology for service provider networks. How exactly will these fit in with Cisco's VPN strategy? Obviously they are two components that make VPNs possible, but other than the routers they make, I didn't realize Cisco had a total VPN package strategy...after all, you still need the fiber. |
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InvestorGuide Daily Administrator |
posted 01-19-2000 07:13 PM
Cisco will buy privately held Altiga Networks and Compatible Systems for a total of $567 million in stock to boost its virtual private network technology. http://news.cnet.com/news/0-1004-200-1526263.html |
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