Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Scott C. Lemon who wrote (28463)	10/6/1999 6:02:00 AM
From: DJBEINO	Respond to of 42771

Novell's Stock Weakens With no Discernible Cause by Glenn Curtis, Senior Analyst (10/4/99) As shares of Novell continue to slide, investors are digging deep to find an underlying cause. A projected earnings shortfall? Not likely since the quarter still has a month to go. Some are trotting out the traditional Y2K concerns: IT managers are reluctant to purchase goods until the New Year. But that would affect all tech stocks, and though some have been weak, none have fallen as precipitously as Novell. Like this Article? Others cite the impending release of Microsoft's (NASDAQ:MSFT - Quotes, News, Boards) Windows 2000 operating system that incorporates features now offered by Novell. Wasserstein Perella's Stephen Dube notes that momentum players are getting out while the stock is trading down. But that explanation also fails to fully account for the swoon. Momentum investors bail just as the stock is starting to break, not after it has already lost 40%. Another possible source of weakness: Senior VP Christopher Stone is leaving the company on October 15, 1999. That comes on the heels of another executive departure. John Slitz, Senior VP of Marketing is on the way out. Preferred Capital Markets's Joel Achramowicz is also dumbfounded. "We can't explain why the stock has sold off the way it has," he says. "After speaking with the company we think that Novell is on target to meet consensus estimates for the fourth quarter (which are now at $0.16 to $0.17 per share, he adds. Achramowicz also doubts that the executives that left the company will have any serious impact on the future of Novell. "We think this is a great buying opportunity which is why we continue to rate the stock a strong buy," he concludes. In the absence of any apparent bad news, we continue to feel that Novell is on the right track to post strong operating results in the quarters to come. Novell is a play based upon the future of directory services. Many of these directory services will play a key role in the development of corporate networks, intranets, and web sites. Leading some to conclude that Novell deserves an Internet-like valuation. We think management still needs to do a better job of articulating the company vision. And a lack of comment in the face of the recent sell-off is another example of management that is conspicuously quiet. Nevertheless, we believe that while the shares may experience weakness on the above concerns in the near-term, the stock appears cheap when compared to other techs in the market such as Sun Microsystems (NASDAQ: SUNW - Quotes, News, Boards), and Cisco (NASDAQ: CSCO - Quotes, News, Boards). Analyst: Glenn S. Curtis Updated on 10/4/99 with NOVL trading at $17.38 Recommended 11/16/98 at $14.38 individualinvestor.com