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 (10239)	3/27/1997 10:17:00 AM
From: Reginald Middleton	of 42771

NOVL is a growth company, therefore it should invest all avaliable cash internally to finance growth, especially considering it competitive situation. Cash must be handled very carefully, and a dividend would reduce the value of the company (discount future cash flows tothe present value). NOVL has not been in a strong cash flow position for quite some time. Free Cash Flow before goodwill has been negative from 1988 - 1995 Free Cash Flow after goodwil has been negative form 1988 - 1995 Non-operating cash flow has been negative in 1988-1991 and 1996 Cash flow available to investors has been negative from 1988 - 1995 NOVL's cash needs to be invested in capital projects that produce returns in excess of the projects expenses added to the weighted average cost of capital. This will increase free cash flow and is really the only way to increase the value of NOVL's shares over the long term. It is the incompetency of incumbent mgmt. that has prevented this from happening thus far. For more info, rcmfinancial.com

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