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: Salah Mohamed who wrote (9956)	3/25/1997 8:41:00 AM
From: doug doan	of 42771

Salah, Several months ago you posted some interesting anaylsis on the return that Novl was getting on all the cash it has. I seem to remember that they were getting 7%. I have never been able to dissuade myself that a very serious buy back of shares ($500 million over next two quarters) would not be a great idea. my rationale is: 1. There is no acquiisition in the horizon that could be as attractive as NOVL. In addition, the ability of management to competently acquire someone else is thin at best. 2. NOVL has a positive and growing free cash flow. Despite all the negative hype, the cash flow does increase quarter to quarter. There is every reason to expect it to continue. 3. 7% is just awful return on $1billion 4. Seems to me that the company is, albeit slowly getting better all the time, a serious buyback would be a clear and convincing argument that they all believe in the future of the company. 5. NOVL would be demonstrating to shareholders that it understands who owns the company. Joe would even put an attaboy to Schmidt on his website and would perhaps retire the "pee boy" for at least a quarter.

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