Biggest things you look for in a stock?

[michiganfan9]

[ QUOTE ]
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

[James Boston]

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.

[michiganfan9]

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.

[RocketManJames]

[ QUOTE ]
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

[/ QUOTE ]

This is a particulary dangerous thought, and you need to move away from it. You say that a company has $10B in sales, but it trades at $8. This does not really tell you enough. The stock price in and of itself does not tell you anything about the valuation of a company. You really need to focus on market capitalization if you're going to throw numbers around like this. And, what you are implying can be stated using a price to sales ratio. Basically, the P/S ratio is way too low, which triggered a few red flags in your mind. Remember that without data normalization, many numbers are useless.

-RMJ

[michiganfan9]

That screen was just very basic. I would never invest in anything without spending hours or research to understand the company fully.

[RocketManJames]

[ QUOTE ]
That screen was just very basic. I would never invest in anything without spending hours or research to understand the company fully.

[/ QUOTE ]

I think you missed my point. If you didn't you can ignore this. I am not challenging the use of a screening tool, or the particular screen that you ran.

My point was that data that is not normalized is usually useless. If I told you, stock A trades for $30. And, stock B trades for $12. What do you know about them? My view is that you know very close to nothing. Why? Those numbers don't mean anything unless they are viewed with respect to the total number of shares outstanding.

This is similar to taking a sales figure without normalizing it to a "per share" basis. Take a company that has $1B in sales. Think of how differently you'd look at this figure if you were to find out that the company had 800MM shares outstanding versus 80MM shares outstanding. The same goes for earnings or any other such value. Without normalizing the data in some fashion, comparisons become difficult, if not impossible.

-RMJ

[michiganfan9]

I understand now, thanks for the post

[RocketManJames]

[ QUOTE ]
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

[James Boston]

[ QUOTE ]
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.

[michiganfan9]

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