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Technology Stocks : Novell (NOVL) dirt cheap, good buy?
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To: Paul Fiondella who wrote (7272)1/23/1997 11:42:00 AM
From: E_K_S   of 42771
 
OK Paul - I will go with this view (as one of many possible scenarios)...What's the smart investment play? Sell 1/2 of our positions on earnings expectations (ie. sell the rumor before the fact) or sell 1/2 position after release of better than expected earnings. Write covered calls on the other half position to generate income while the company is downsized and can show the street what the new revenue, sales (growth) targets and profitability numbers will be going forward.

IMO the value investor should continue to stay in as in this scenario, management's plan to downsize will still utilize the rich assets which will eventually yield a good rate of return. The downside risk still remains low based soley on the asset play.

Other strategies?

EKS
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