From thestreet.com newsletter
Tech Savvy: Three Easy Pieces: Watching the Smart Internet Stocks
By Jim Seymour
Special to TheStreet.com
Even during this short week on the Street, there were some lessons to be
learned. In tech stocks, one of those lessons is that virtue is rewarded --
well-managed companies with good products are rewarded in the market, as
well as in the marketplace.
Whether that interests you depends a lot on whether you're a trader or an
investor. (Though I confess I have an increasingly hard time separating the
two. Is the time horizon -- always at the root of those definitions -- now
really that much shorter for traders than for investors? Can even the
longest-term investor feel safe not tracking daily fluctuations? What about
hourly fluctuations? I dunno: Send me a note with your ideas.)
Anyway, if you still have room on your dance card for companies that
prosper the old-fashioned way, with growing sales and growing profits based
on a growing product line and a growing customer base, this week offered
Three Easy Pieces (with apologies to Bob Rafelson): three tech stocks that
moved nicely in response to smart managers' good results. I think there's
still money, including near-term money, to be made in them all:
* Novell (NOVL:Nasdaq) has been wandering in the woods for a long-time,
but former Sun (SUNW:Nasdaq) exec Eric Schmidt has moved the
networking software company from an ego trip to a business
proposition. Especially with Microsoft's (MSFT:Nasdaq) Windows 2000
(nee NT 5.0, a.k.a. Late Again) slipping further behind, and getting
mired even more deeply in the coming Y2K "unspending" cycle in
corporate America, Netware 5 looks better and better to companies
which have a lot of Netware servers installed, but had been looking
towards a migration to Windows 2000. Why? Netware has been delivering
global directory service, while Microsoft has been promising it.
On Tuesday, Novell reported fiscal 1998 revenue of $1.08 billion and
profits of 29 cents a share, up smartly from 1997's $1 billion and
reversing the year-ago 22-cent loss. That despite a 39% drop in Asian
sales -- itself, not bad this year for an enterprise software company.
Novell closed down a little Tuesday at 17 and change, before the
results were released, but on Friday closed at 17 15/16. More than 40%
of Novell stock is held by institutions, which is encouraging. For a
stock that has slid inexorably since dancing around 25 in 1994 --
arguably its last good year -- and is now up 70% from the recent
October Badness, I'd say Novell's back in town. And likely to go
further before the end of the year, and into 1999.
BTW, thestreet.com is the best subscription money I've ever spent!
Vahe Guzel |
