Re: Biggest things you look for in a stock?
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Also, you will see that companies that have been active in acquisitions often have a lot of debt [/ QUOTE ] Well Cisco systems has no debt and has acquired April 27, Sipura Technology (by Linksys) Voice over IP specialist April 14, Topspin Communications Server Fabric Switches January 12, Airespace Wireless LAN solutions 2004 December 20, Protego Networks, network security software December 9, BCN Systems, flexible routing software November 17, Jahi Networks, Network Management appliances October 21, Perfigo, Network Access control September 13, dynamicsoft, SIP software September 9, NetSolve, IT infrastructure management August 23, P-Cube, IP service control platforms July 8, Parc Technologies, traffic engineering solutions June 29, Actona Technologies, Storage networking solutions June 17, Procket Networks, router silicon expertise March 22, Riverhead Networks, Distributed Denial of Service attack software March 12, Twingo Systems, desktop security with SSL and VPNs 2003 November 12, Latitude Communications, audio and web conferencing March 20, Linksys Group, Consumer/SOHO access devices March 19, SignalWorks, Echo Cancelling software January 24, Okena, Intrusion Detection software 2002 August 20, Andiamao Systems, Storage switching systems July 25, AYR Networks, Distributed networking software May 1, Navarro Networks, Ethernet ASIC design house May 1, Hammerhead Networks, Networking software design house 2001 July 27, Allegro Systems, VPN acceleration July 11, AuroraNetics, RPR chipset company 2000 December 14, ExiO Communications, In-building CDMA wireless November 13, Radiata, 802.11a wireless November 10, Active Voice, Unified communication software October 20, CAIS Software, Multi-unit building softare September 28, Vovida Networks, Voice over IP software September 28, IPCell Technologies, Software for integrated VoIP August 31, PixStream, Hardware and software for video August 1, IPmobile, 3G Wireless software July 27, NuSpeed Internet Systems, iSCSI solutions July 25, Komodo Technology, VoIP devices July 7, Netiverse, Content aware switches June 5, HyNEX, ATM + IP Access devices May 12, Qeyton Systems, Stockholm, Sweden metro DWDM systems May 5, Arrowpoint Communications, Content aware switches April 12, Seagull Semiconductor, Terabit switch semiconductors April 11, PentaCom, Pre-standard RPR switches March 29, SightPath, Appliances for content delivery March 16, infoGear Technology, Info Appliance management software March 16, JetCell, In-building wireless telephony March 1, Alantech Technologies, San Jose, California Network management software February 16, Growth Networks, Switch fabric chipsets January 19, Altiga Networks, Integrated VPN solutions January 19, Compatible Systems, Service provider VPN solutions 1999 December 20, Pirelli Optical Systems, DWDM equipment December 17, Internet Engineering Group, Optical networking software December 16, Worldwide Data Systems, Consulting and engineering services November 11, V-Bits, Video processing systems November 9, Aironet Wireless Communications, Wireless LAN products October 26, Tasmania Network Systems, Web caching software September 22, Webline Communications, Contact management software September 15, Cocom, Cable modems August 26, Cerent, SONET ADMs August 26, Monterey Networks, Optical transport products August 18, MaxComm Technologies, Voice over DSL August 16, Calista, IP PBX solutions June 29, StratumOne Communications, OC-192 chipsets June 17, TransMedia Communications, Media Gateway products April 28, Amteva Technologies, Unified IP communications sofware April 13, GeoTel Communications, Nework based call routing software April 8, Sentient Networks, Voice over ATM systems April 8 Fibex Systems, Integrated Access Digital Loop Carrier 1998 December 2, Pipelinks, Data oriented SONET ADMs October 14, Selsius Systems, IP telephony solutions September 15, Clarity Wireless, Last mile wireless solutions August 21, American Internet, IP address manangement software July 28, Summa Four, Programmable switches May 4, CLASS Data Systems, Policy based Networking Solutions March 11, Percept Software, IP television products March 11, NetSpeed, DSL CPE equipment February 18, WheelGroup, security software 1997 December 22, LightSpeed International, Voice over ATM products July 28, Integrated Network, (Dagaz business line) New Jersey DSLAMs June 24, Ardent Communications, San Jose, California Multiservice access products June 24, Global Internet Software Group, Firewall software June 9, Skystone Systems, Ottawa, Ontario SONET products March 26 Telesend, DSL channel units 1996 December, Metaplex, SNA to IP migration October 14, Netsys Technologies, Network simulation September 3, Granite Systems, Gigabit Ethernet Networking August 6, Nashoba Networks, Token Ring switches July 22, Telebit (MICA products), Cupertino, California, OFDM/DMT modem technology April 22, StrataCom, San Jose, California ATM based network systems January 23, TGV Software, Internet software maker 1995 October 27, Network Translation, NAT and firewall solutions September 27, Grand Junction Networks, Fast Ethernet switches September 6, Internet Junction, Internet gateway software August 10, Combinet, ISDN remote access 1994 December 8, LightStream, Enterprise ATM switches October 24, Kalpana, LAN Switches July 12, Newport Systems Solutions, Software based routers 1993 September 21, Crescendo Communications, LAN Switches Just one example |
Re: Biggest things you look for in a stock?
Proctor & Gamble has about 3 times as much debt as it does cash, and they're acquiring Gillette which has about the same. Yet, your beloved Warren Buffett continues to bet on both. I'm not saying Cisco is a bad company. There are a few debt free companies I've been looking at. I'm just trying to get you out of the mind frame where you seem to set up a stock screener and decide that those who pass are good investments, and those who don't aren't. No one, two, or three metrics are going to tell you what a good investment is. In fact, I find the qualitative aspects of investing to be just as, if not more, important than the quantitative.
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Re: Biggest things you look for in a stock?
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Also, you will see that companies that have been active in acquisitions often have a lot of debt. [/ QUOTE ] Operative term being "often." [ QUOTE ] Just one example. [/ QUOTE ] Exactly. Also, Cisco's acquisitions were probably mostly stock deals. At least those during the bubble years 1999-2001. Not sure, as I haven't really followed all their acquisitions that closely, but it would make sense. Using inflated stock currency to buy technology seems like a cheap way to go about it. Also, how big were the deals in the acquisition list you provided? I haven't looked at any of them specifically, just wondering if you knew. Cisco commands a market cap of $120B+. When it seeks to buy a company for as much as $1B, this is much small potatoes for them. Contrast with larger acquisitions... here are few to serve as examples: Eastman Kodak buying Creo for about $1B IAC Interactive buying AskJeeves for around $1.9B Oracle buying Peoplesoft for roughly $10B Washington Mutual buying Providian for $6.5B -RMJ |
Re: Biggest things you look for in a stock?
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Also, Cisco's acquisitions were probably mostly stock deals. At least those during the bubble years 1999-2001. [/ QUOTE ] This was my first thought, but I wasn't up for digging into it to see if I was right. |
Re: Biggest things you look for in a stock?
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The only time i dont' like a stock with debt is when the debt is more than its total cash. [/ QUOTE ] Debt is often good. Companies need to borrow to grow. Well managed companies with debt are often good companies. Management should react to oppurtunities as they become available, not wait until they have the cash on hand to exploit them. On the other hand, companies with lots of cash and no debt usually have little or no growth. A growing company would have oppurtunities put the cash to good use. |
Re: Biggest things you look for in a stock?
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I agree. The only time i dont' like a stock with debt is when the debt is more than its total cash. [/ QUOTE ] This shouldn't exclude buying a company's stock necessarily. What about if a company issues new debt as fast as it's paying it off but the cash and equivalents is far less than it's current debt? The truth is that the proper capital structure for a business is open to debate a lot but it is influenced by the type of business a company is in along with other factors like market share and volitility of earnings. Look at the bond ratings for the company to get a clue as to the riskiness of earnings. Debt gets favorable tax treatment, pure and simple, so it makes sense for companies to use leverage. For a discussion on how leverage can be utilized to increase earnings I refer to Damodaran's Investment Valuation opus. BTW having no debt isn't a panacea to making great investments. I've maintained for a long time that MSFT has a sub optimal capital structure and this is one of the reasons that the stock has gone nowhere for so long FWIW. |
Re: Biggest things you look for in a stock?
I'm not saying that stocks that I run through screens are good investments and others aren't. I know that I'm wrong if I would say that. I love P and G and think that the acquisition with Gillette was huge. Two extremely well managed companies joining forces. I don't really run that many stock screens anyway. In my mind it can be decieving. I found a stock that had over 10 billion dollars in sales yet was trading at $8. There was a big reason why it was trading there and that is why I don't think that particular stock was a good investment. I probably am not just thinking before I type, and i'm sry for that. I want to learn everything about the market and that is why i'm asking you guys.
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Re: Biggest things you look for in a stock?
That is why you are probably right. Cisco's acquisitions were nothing more than $200-600 million dollar companies, local around the california area. I skipped over the word often which he did point out. My fault
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Re: Biggest things you look for in a stock?
good post
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Re: Biggest things you look for in a stock?
If I looked and researched a stock and liked him that much and saw that it had more debt than free cash, I would still buy it. Now that I have read all of your posts I see where debt can be a good thing. KEEP POSTING!!! [img]/images/graemlins/smile.gif[/img]
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