Cisco Systems Inc. (CSCO)

All Comments on CSCO

  • commenter
    tessant
    Feb 12 06:33 PM
    My Website
    3 Tech Stocks With Serious Potential - Barron's [view article]
    Where is my SNDK? SIGM? Come on BEARons


    scott w
    www.growthportfolio.ni...
    "the facebook of investing"     Reply
  • commenter
    User 88566
    Feb 11 08:07 PM
    Who's Sharing Cisco's Cash? [view article]
    I made an analysis similiar to Albert's only not as in depth. I saw an article somewhere that they issue 2% of the outstanding stock each year as option. I also noted that the number of outstanding share did not decrease. An unsubstainalble pretices for an length of time. Unless the only stockholders are employees. I have a long position at present. Reply
  • commenter
    User 57963
    Feb 11 07:30 PM
    Who's Sharing Cisco's Cash? [view article]
    I sold off my 10-year position in Cisco several years ago for this very reason. The continual dilution of equity via stock options was tolerable back in the days when the company was growing at 40-plus percent. But IMHO it is intolerable at any reasonable future growth rate for such a large company. I'm amazed the analysts never press this point; they must have fully ingested the Kool-aid! Reply
  • commenter
    Albert Meyer
    Feb 11 11:58 AM
    Who's Sharing Cisco's Cash? [view article]

    [Please pardon me if this message is posted more than once. I tried twice as a non-registered user, but nothing happened. I emailed the website, but no response. I then registered, logged-in and will now make another attempt at this. Again, forgive me if multiple posts appear.]


    Since 1995, Cisco spent approximately $45 billion buying back 2.2 billion shares. Employees paid $15 billion to exercise 2.2 billion options. Despite all the cash spent on buybacks, the share count remained essentially the same. The net $30 billion the company spent on buying back stock is in reality compensation paid in a roundabout way; not that the accounting rules would reveal such a scandalous fact.

    The "F" in FASB stands for fraud. FASB rules help deceive investors and give management the right to boast that they are "returning cash to shareholders." The only shareholders getting the cash are the employees. Cisco supports the stock price when employees flood the market with option exercises.

    Here's the deal breaker: there are 1.2 billion options awaiting exercise, a dilution of 22% looms. Cisco will report "record" earnings, but it will use those "earnings" to buy back stock and mop up dilution.

    There is one heartening fact amidst the gloom. Balance sheets don't lie. Stock buybacks are appropriations of profit. Cash spent on buybacks is classified as Treasury Stock and netted off against Retained Earnings. There has been no growth in Retained Earnings the past twelve years. In fact, in 2006 the balance sheet reported an "Accumulated Deficit" of $600 million. Today, "Retained Earnings" comprises only $0.04 of Cisco's approximately $4 book value per share.

    In cash flow terms, the company generates more cash selling stock to employees at a deep discount than it does selling equipment to customers. Growth in Paid-In Capital exceeds top line growth. Let me remind you, last year after Barron’s touted the stock and Cisco reciprocated (awful thought) with double spread color advertisements, the company’s market capitalization surged to $200 billion. Executives quickly cashed out over a hundred million dollars worth of options.

    I'm not short the stock. That way I can post this message without fear of the SEC terrorizing me. Cisco can publicly state that they are "returning cash to shareholders," which is a bold face lie, and regulators turn a blind eye. Post something on a message board that might cause you to gain on the short side and you risk arrest.

    Just to protect myself further, all amounts above are approximations - do your own math. In principle, regardless of the numbers, the truth remains, Cisco is a company operated for the benefit of executives and employees. Shareholders don't have a prayer to ever make dime, other than to play the short-term volatility.

    Albert Meyer (no pseudonyms for me)

    Reply
  • commenter
    Augustus
    Feb 11 07:10 AM
    Who's Sharing Cisco's Cash? [view article]
    One interesting measure is Book Value per share.
    When a company consistently reports positive earnings, pays no dividend, and the Book Value has little change, it should make an investor pause to consider what is happening to the supposed profits.

    CSCO was one of the most egregious issuers of stock options for employees. I haven't looked it up for some time. But the potential dilution seemed to make it almost impossible for an investor to ever make a profit.

    Generally an OK business. You just don't get to participate in the success. But can say you own something in your portfolio.

    JMHO.     Reply
  • commenter
    Tom B
    Feb 11 12:01 AM
    3 Tech Stocks With Serious Potential - Barron's [view article]
    I looked at Cisco. Thier numbers look good at firts glance, but they seem to be moving in directions where they won't gain traction, like IPTV. Reply
  • commenter
    Alpha Seeker
    Feb 10 10:10 PM
    3 Tech Stocks With Serious Potential - Barron's [view article]
    AKAM CEO's doubting that the economic slowdown will affect the company. That sounds like Cisco in 2000. Look at a chart os Cisco in 2000 and now, the copmpany is still down 30-40 % since then. A nice outlook and a blatant lie for the shareholders.Rob
    WallastonInvestments.c...     Reply
  • commenter
    Syl
    Feb 09 09:50 PM
    Wall Street Breakfast: Must-Know News [view article]
    Which bank corporation are you repoeting on? Bank of America or Bank of New York. Reply
  • commenter
    Walt17
    Feb 09 06:33 PM
    Time to Start Buying Dips in the Technology Sector [view article]
    You state that "Even in an economic slowdown, companies continue to invest in technology." Perhaps I misunderstood, but my impression was that Cisco's CEO subtly suggested that companies may reduce investing in technology. Tech may be oversold, but oversold can become way oversold. I'm not inclined to bet on a turnaround yet. I'd rather get to the party a bit late, than too early. Reply
  • commenter
    Socialism
    cannot
    compete!
    Feb 08 05:27 PM
    Time to Start Buying Dips in the Technology Sector [view article]
    I agree that the sector is oversold. However, I do *not* agree that the recession will be short (less than 1 year) or that its effects will be minimized by the moves you mention. For starters, the very emerging market growth you mention as helpful to global companies, will also be what keeps the U.S. from recovering quickly...because it means that commodities will continue to rise in demand, with the effect being inflationary. We just saw that today with the commodities and energy markets. And we've been hearing from Regional Fed heads the last week about how they may be constrained from much more in the way of rate cuts. What we are facing is stagflation...and that cannot resolve in a matter of months, particularly with the bottom of the housing and credit iceberg still to be exposed. We are looking at 18 to 30 months before we resume normal growth of GDP > 2% for 2 consecutive quarters.
     Reply
  • commenter
    Bob The
    Trader
    Feb 08 11:56 AM
    Time to Start Buying Dips in the Technology Sector [view article]
    All responsible financial institutions preach about market unpredictability and hence the need to focus on long term investment goals via asset allocation. They also preach about looking at the fundamentals while deciding who/what to invest it. However I am convinced that the market unpredictability is driven by wall street expectations and fundamentals are just part of the equation but hardly the key driver in the market movements. Is it just me that thinks this? Reply
  • commenter
    Bob The
    Trader
    Feb 08 11:40 AM
    Time to Start Buying Dips in the Technology Sector [view article]
    Wall Street is ran by a bunch of overreacting buffoons. The market goes up or down at their whims and fears, forget the fundamentals, let's just run around like chicken little because the sky is falling. Well at least chicken little has a real reason, what's your lame excuse, wall street? Reply
  • commenter
    flow5
    Feb 08 10:33 AM
    Friday Outlook: On the Brink of Stagflation? [view article]
    And we will never extract ourselves from an increasing vicious level of stagflation within the confines of a free capitalistic society. Reply
  • commenter
    bluebox
    Feb 08 09:31 AM
    Time to Start Buying Dips in the Technology Sector [view article]
    From your keyboard to the big institutional elephant's ears.

    Unfortunately, I don't think they'll be listening any time soon.     Reply
  • commenter
    SA Editor
    Eli Hoffmann
    Feb 08 09:19 AM
    This Week's Market Quiz [view article]
    Thank you fghess -- I have corrected the quiz. Reply
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