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 (22246)	5/23/1998 12:21:00 PM
From: EPS	Read Replies (2) of 42771

Hi Eric, It is nice to talk to you. I know you are one the fathers of this thread. I like to discuss a bit more this idea of a possible merger between Netscape and Novell. I also view this as a very exciting possibility for both companies. Unfortunately it does not seem to be in cards for now. I never quite understood what went wrong in the joint venture Novonix and why the whole collaboration theme was shelved. At current earning projections for Y98 of .25 NOVL's PE is about 40, I think a reasonable estimate for Y99 earnings is .5 which at current PE would give a valuation of 20. I expect we could reach this valuation sooner than some people here think specially once a date for shipment for Netware is at hand and the reviews of the final version are very positive. It is also likely that momentum could be created once it becomes clear to analysts that earnings are going to double for next year. The street usually factors in a premium to growing earnings. The mixture of negative and positive sentiment is Bullish and is exactly what one would expect in a turn around situation when the slope just starts to be positive. Regards Victor

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