Think about it the other way around: If Cisco gains 10% every three months, that's 46% annual growth. It's a triple in three years, and nearly seven times your money in five. That's a rare feat, especially for companies as large and established as Cisco.
No matter how hot the networking market is, you can't expect old Cisco to keep up with the top growth stories in an equally hot sector -- in the fastest-growing economies in the world.
So we're back to reality, or at least a little closer to it. Cisco shareholders have seen a market-beating 27% return over the last year, even including this 8% drop. Most investors would be very happy if they could average that kind of return on their holdings, and from a one-year perspective, the stock was doing better than mighty Google until very recently.
In the earnings call, Cisco CEO John Chambers sounded optimistic about the future. He sees Web 2.0 technologies and online video driving demand for network capacity and profitable growth for his company for at least a few more years. "In short," he said, "we are going to attempt to execute a very similar strategy over the next decade to what we did in the early 1990s."
How's that for a long-term perspective? The company expects to deliver revenue growth between 12% and 17% for the foreseeable future and has a welcome tendency to grow earnings more quickly than sales. In other words, I need to stop writing about Cisco so I can go out and start a position one of these days -- hopefully at a somewhat reasonable price, like the one we got today. But I'm willing to overpay for quality like this, so we'll just have to see where the price goes during the disclosure-mandated 10 days of silence that lie ahead.
Wish me luck.
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Fool contributor Anders Bylund kept quiet for a month just to buy some Google shares, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is always worth the trouble.