NEW YORK (CNN/Money) - Want to find a hot stock? Just look for almost anything with the word "networks" in the corporate name.

Shares of Extreme Networks are up nearly 30 percent this year. Juniper Networks is up more than 50 percent. And Foundry Networks has surged 55 percent. That's some serious sizzle.

In fact, it makes the performance of Cisco Systems, the networking Goliath even though the word networks isn't in its name, positively paltry -- a mere 14.5 percent gain.

Now maybe I'm just a nattering nabob of networking negativity. But why are Juniper, Extreme and Foundry outperforming Cisco? Is it reasonable to expect that the stocks of these much smaller rivals can continue to do so? Probably not.

We've been down this road before. When Extreme, Foundry and Juniper all went public in 1999, the stocks surged on the hopes that these companies would rapidly gain share in routers and switches, pieces of equipment that are used to connect computers to networks.

In other words, they were expected to eat Cisco's lunch.

That hasn't exactly happened. According to Dell'Oro Group, a networking research firm, Cisco has about 85 percent market share in the router market, compared with Juniper's 9 percent.

And in the switches market, Cisco is solidly in first place, with nearly 70 percent market share. Extreme and Foundry are fourth and fifth respectively, trailing Nortel Networks and 3Com.

So why have the three stocks had such a torrid tear? Well, they were beaten up pretty soundly last year, said Adam Adelman, senior portfolio manager with Philippe Investment Management, a New York-based money management firm.

"You can make a fair argument that they were undervalued," Adelman said. "Some were priced for bankruptcy so it's not that surprising that we've seen this bounce."

To that end, at its 52-week low of $2.33, Extreme (EXTR: Research, Estimates) actually was trading 27 percent below its book value, which meant that investors thought the company would be worth more if its assets were sold off.

Juniper (JNPR: Research, Estimates), at a low of $4.15, was only 8 percent above its book value. And Foundry (FDRY: Research, Estimates), at a low of $4.08, was trading only 20 percent above its book value, which is the value of a company's assets minus its liabilities. By way of comparison, Cisco still was trading at 2 times book value when it hit its nadir. All four stocks hit their lows last October.

These sell-offs probably were overdone. And for what it's worth, analysts are predicting an earnings increase of 128 percent for Foundry this year while Juniper is expected to return to profitability after posting a loss in 2002.

However, Victor Valdivia, an analyst with Hudson River Analytics, an independent research firm that focuses on technology infrastructure companies, is worried about valuation.

Cisco (CSCO: Research, Estimates), trading at 25 times earnings estimates for calendar year 2003 (Cisco has a fiscal year that ends in July), is the cheapest of the bunch. Foundry is trading at 27 times earnings estimates. Juniper is trading at 128 times 2003 earnings estimates. Extreme is not expected to be profitable this year or next.

Valdivia has a short position in Juniper (which means he is betting that the stock will fall) because of its greater exposure to the troubled telecom sector. He does not have a position in Cisco, Extreme or Foundry.

Cisco is expected to report Tuesday that fiscal third-quarter revenue fell 5 percent from a year ago. Earnings are expected to improve though, thanks to cost cutting. Analysts are forecasting earnings of 14 cents a share, up from 11 cents a year ago.

"Things have stopped getting worse but this doesn't mean we'll see a rebound soon," Valdivia said. And if that's truly the case, that does not bode well for the likes of Juniper, Extreme and Foundry.

Along those lines, Adelman said he would not be chasing these stocks following their big runs. His firm does not have a position in any of these stocks but it does own shares of Cisco.

And for the long-term, that seems to make the most sense. Sure, critics have taken Cisco to task for its recent acquisition of Linksys, a company that operates in the relatively low-margin business of selling routers to individual consumers as opposed to big businesses. And earnings and revenue growth is slowing as the company matures.

But Cisco, much like other large-cap market leaders such as Microsoft and Dell, continues to generate gobs of cash in a rough environment.

Recently in Tech Investor Spitzer has more to do Is the tech rally for real? Overture's sour notes

As of the end of January, Cisco had $21.2 billion in cash and investments on its balance sheet. Juniper, Foundry and Extreme had a combined total of $1.9 billion as of the end of their most recent quarter. So how are these three supposed to compete effectively against Cisco?

"Juniper, Foundry and Extreme will carve out a little niche for themselves, but their long-term growth potential is restricted by Cisco," Adelman said.

That was the case in 1999 when they went public. Four years later, nothing has changed.