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$23.12 0.28 (1.23%)
7/3/2008 1:00 PM

Cisco Systems, Inc. (CSCO)

CAPS Rating:
****

The Company designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry and provide services associated with these products and their use.

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Avatar rd80 (99.64) Submitted: 5/25/07 9:30 PM : Outperform Start Price: $25.91 CSCO Score: 0.53

I'm maintaining an 'outperform' pick on CSCO despite disappointing performance since the earnings release and conference call earlier in May '07. The stock fell after the conference call despite slightly beating analyst's estimates and reiterating good growth forecasts of 15-16%. Basically, CSCO beat estimates, but many were expecting a blowout and didn't get it.

With recent pullback to the mid 25's, CSCO is trading at a fwd PE of about 16.5, only one point higher than the S&P 500. This for a company with strong growth, $22+B of cash and only a little over $6B in debt. If they're only getting typical money market/t-bill rates, CSCO is netting nearly a billion a year just from the cash.

I believe there's $10-$15 upside potential with very little downside risk from here.

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Avatar rd80 (99.64) Submitted: 8/09/07 9:18 PM

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On 7 Aug, CSCO announced earnings that beat estimates by a penny - just like last quarter. Other than that, what a difference.

So, how does a one-penny earnings beat by CSCO translate into a one-day gain of nearly 7%? The answer - it doesn't. What drove CSCO on the 8th was the higher guidance provided in the conference call and the picture painted of a very strong business climate, new cycle of internet and networking build-out, outstanding growth in emerging markets, new technologies with exciting growth prospects, and John Chambers stating this is the strongest business environment he's ever seen. Add to that a huge pile of cash as we're entering a time when cash is king. If you at all follow tech / internet business, I highly recommend listening to the CISCO conference call and following along with the presentation slides.

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Avatar witty13 (< 20) Submitted: 8/21/07 12:41 AM

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very little downside risk.....oops...did ya forget subprime mess?????

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Avatar rd80 (99.64) Submitted: 8/21/07 7:11 PM

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Care to explain how Cisco is exposed to the subprime mess?

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