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: Elmo Gregory who wrote (4506)	11/2/1996 7:56:00 PM
From: E_K_S	of 42771

Hi Elmo: The Sell Discipline as practiced by Robertson Stephens & Company - The Information Age Fund Excerpts from their July 1996 2Q Report. Sell Discipline "We consider selling or initiating the process when: o A stock becomes overvalued because of price appreciation. Our valuation measure will prompt us to take our gain in the stock and reinvest in another idea. << No problem here for Novell>> o The business fundamental of a stock or industry deteriorate. <<The Industry is solid with estimated growth of 20% through 2005. For Novell, I think the large institutions are waiting for Q4 and Q1 numbers. We can check changes in the institutional holdings on WWW.smartcom in a few days after they update their database. I believe you are correct that the institutions which now hold Novell are waiting....???>> o Company growth rates slow to less than our targeted 15-20% rates. <<Novell's growth rate could be in this range but over the last 18 months it is somewhat under this rate.>> Here is their Investment Commentary: " We continue to focus on software and datacom companies that are helping build the hardware and software content on the Internet's communication network. Recent business information from leading personal computer manufactures point to a stable PC market and a resumption in demand. Intel has indicated that its unit volume sales to the worldwide PC Industry are growing about 20%. Two incremental technology platforms are poised to contribute to technology in the latter half of 1996, and more importantly to a strong 1997. The two developments include Intel's next advanced processor, the Pentium Pro, and Microsoft's network and client operating system,NT. We believe these products coupled with the Pentium and Windows 95, set the stage for technology advancement and expansion within the personal computer market for years to come. We expect this expansion to encompass the business, home and educational sectors globally." Top Ten Holdings: 1) Oracle Corporation......4.15% 2) PeopleSoft, Inc.........4.44% 3) U.S. Robotics, Inc......4.26% 4) Microsoft Corp..........4.16% 5) HBO & Company...........3.75% 6) Netscape Communication..3.45% 7) Pairgain Technologies...3.43% 8) Cadense Design Inc......3.41%...<<Recently merged>> 9) Parametric Technologies.3.12% 10)Ascend Communications...3.12% ------------------------------------------------------------------- No mention of Novell but Novell should be (according to our management) a significant participant in the development of the "Internet Communication Network". I am puzzeled too by Novell's long term business plan and how it will eventually fit into the overall development of the Internet Communication Network. From the top ten companies listed above, does Novell's approach overlap with anything these companies do?? Answer, Yes, No and maybe. VK did post something I have been thinking about and that is that EVERY software product Novell sells requires Netware 4.xx. If a client has no Netware 4.xx....no sale <period>. Our management's long term business plan should again focus more on the "open architecture" and perhaps develop other complementary products which do not rely on Netware 4.xx. Their approach of building the "standard" NDS could be a very big gamble for the company if it fails. I would sure like to have a fall back position. I feel our management is lacking in describing (to their shareholders and their customers) their long term vision( ie. business plan) over two years as stated in their Mission Statement ...to be the leader in connecting people to the "Internet/Intranet Communication Network". Could it be that they have not developed a plan out futher than 1997 or they just have not communicated this to us? Perhaps the new CEO will provide us with this...88 days and counting... EKS

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