Cramer: "Cisco's Now Exploding the Right Way, Up"
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Cramer: "Cisco's Now Exploding the Right Way, Up"
"Cisco's Now Exploding the Right Way, Up"
By Jim Cramer
RealMoney.com Columnist
11/9/2006 8:27 AM EST
"Much of what's happening now with Cisco (CSCO - commentary - Cramer's Take - Rating), as embodied by its just-reported quarter, should have happened six years ago. The investment then is paying off now, and it will keep paying off.
Six years ago I visited Cisco and sat down with the convergence team, all the people who were going to make voice/data/cable TV work for the telcos. Cisco was going to own that business. But the phone companies weren't ready and didn't have the money and were still trying to figure out whether the triple play was worth it. They were still fat and happy.
Cisco didn't have the cable piece yet; that came from what now turns out to be the brilliant acquisition of a company that had hitherto been considered pretty second-rate, even though its clients were never second-rate, Scientific-Atlanta. But now that Cisco has them both and now that the phone and cable companies compete nationwide, you have real orders that are going to last a long time.
Cisco never lost its core network business. But when you layer on the work that it's now doing for the phone and cable companies, you can see that the explosion in earnings that should have happpened in the early 2000s now is happening. Given that the sunk costs are all made and given the ready-and-willing customers and given the miraculous share that Cisco has taken from everyone else, you can see why this stock is still a buy, even at $27.
Cisco tends to be a stock that sits and sits and sits and then explodes for days after earnings. It's doing it again, and after exploding the wrong way for years, it's now only one way: up. "
(in www.realmoney.com)
By Jim Cramer
RealMoney.com Columnist
11/9/2006 8:27 AM EST
"Much of what's happening now with Cisco (CSCO - commentary - Cramer's Take - Rating), as embodied by its just-reported quarter, should have happened six years ago. The investment then is paying off now, and it will keep paying off.
Six years ago I visited Cisco and sat down with the convergence team, all the people who were going to make voice/data/cable TV work for the telcos. Cisco was going to own that business. But the phone companies weren't ready and didn't have the money and were still trying to figure out whether the triple play was worth it. They were still fat and happy.
Cisco didn't have the cable piece yet; that came from what now turns out to be the brilliant acquisition of a company that had hitherto been considered pretty second-rate, even though its clients were never second-rate, Scientific-Atlanta. But now that Cisco has them both and now that the phone and cable companies compete nationwide, you have real orders that are going to last a long time.
Cisco never lost its core network business. But when you layer on the work that it's now doing for the phone and cable companies, you can see that the explosion in earnings that should have happpened in the early 2000s now is happening. Given that the sunk costs are all made and given the ready-and-willing customers and given the miraculous share that Cisco has taken from everyone else, you can see why this stock is still a buy, even at $27.
Cisco tends to be a stock that sits and sits and sits and then explodes for days after earnings. It's doing it again, and after exploding the wrong way for years, it's now only one way: up. "
(in www.realmoney.com)
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