Novell (NOVL) dirt cheap, good buy? Message Board

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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: E_K_S who wrote (15188)	8/3/1997 3:12:00 PM
From: Salah Mohamed	of 42771

Hi EKS...About Cash Flow >>They do take some large depreciation charges and other book entry items that impact earnings but not the free flow cash flow. I sure hope it remains positive.<< The depreciation charge runs 20M-25M per quarter. Considering the net loss in Q3 would be around 100M, I don't think their free cash flow will remain positive. However, it will be positive in the subsequent quarters. >>Also, any guess as to the increase/decrease to cash? Should we expect that the $1 billion in reserve will fall to something less.<< From Q2 results, the cash was 1.044B. My best guess is that the cash will stay around 1.0B (slightly less than 1.044B). In Q2 they lost 50M on their stock market investments. Hopefully, they made up for some of these losses in Q3. >>Did you notice what happened to Unisis Thursday after one analysts released a report as to what their break up value is...as much as $28 per share!. Unisis moved up sharply Thursday and Friday and is now over $11 per share. Perhaps a similiar report might be released based on Novell's technology and potential break up value.<< Yes, I did. But all the good words about UIS came after they reported better than expected results which indicated that a turnaround is taking place. I'm not familiar with UIS business. But in the case of Novell, it is clear that most of their products are tightly tied to NetWare and probably it doesn't make much sense to think about break up value here. Novell's turnaround most likely will depend on the success or failure of Moab. This is clear from Schmidt's deadline of 4/1/98. Regards Salah

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