TheStreet.com TV Recap
TheStreet.com TV Recap: Cisco Slowdown a Crock
TheStreet.com Staff
12/17/07 - 02:49 PM EST
Market players who don't have confidence in Cisco (CSCO Quote) should go read the Juniper (JNPR Quote) call from two weeks back where Juniper CEO Scott Kriens talks about how there is no slowdown whatsoever for his company or for Cisco, Jim Cramer said on TheStreet.com TV's Wall St. Confidential Web video Monday.
"Cisco keeps getting pinned by people who ask certain questions," he explained. The company has all these silos of business, and Cramer said if he were to learn that the Singapore or Malaysian silo was going to slow down, he would be very concerned, but the fact is they aren't slowing down.
Instead, all people hear about is how financial service slowdowns are going to affect Cisco, he said. Kriens came up with some good analysis of financial services, saying that there are always companies that say they don't want to spend right now because they want to make their quarter, Cramer said. But then these companies come right back as they realize they have to spend.
"In the imperative of what Scott Kriens is saying, but that Cisco hasn't said, which is unfortunate, is that you really can't cut back on what Cisco offers because of the way of the adoption of the Net, whether it be video or just the need to be fast," he said. "So we should, within the confines of customers, recognize that it is hard to cut back.
"Now if the customer universe shrinks -- a lot of hedge funds go under -- that would be bad," Cramer continued. "I used a lot of Cisco product at my hedge fund. But there is no shrinkage of hedge funds. That's just another one of these canard stories.
"The resilience of the financial service industries is routinely downplayed by both the analysts and the media," he said.
According to Cramer, Cisco is moving up now because people recognize that that last quarter was good, not bad, and that Cisco had just been "overtly reflexive" to questions pertaining to financial services.
"Cisco sells at 18 times earnings and it's got a 13% growth rate, and that's just kind of wrong," he said. "Until Cisco gets to $33-$34, I would keep buying it." Cisco was trading around $28.20 during the midafternoon.