Cisco Systems, Inc. (NASDAQ:CSCO)

ElCid16 (93.83) Submitted: 5/10/2012 1:40:32 PM

Recs: 1

"[EV is] less than 6x FCF"

Agreed. I thought this was cheap before the 10% haircut. However, for companies like CSCO, MSFT, ORCL, TEVA, etc. who have become "serial acquirers," when do you start subtracting acquisitions out of FCF? You know they're gonna buy a bunch of stuff every single year, no?

TMFDitty (99.53) Submitted: 5/11/2012 12:26:51 AM

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That's actually an excellent point. And the answer is: "As soon as I notice it."

In small companies like EBIX, NUAN, NFLX, for example, I notice it right away and ding the FCF number for acquisition costs. With companies as big as CSCO, I tend to miss it. But the good news for CSCO is that with most years' acquisition costs being in the neighborhood of $300M or so, this is more of a rounding error than a serious problem.

sarfralogy (< 20) Submitted: 10/26/2012 11:43:31 AM

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