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

To: EPS who wrote (29182)	11/30/1999 5:36:00 PM
From: Paul Fiondella	Read Replies (2) \| Respond to of 42771

NOVL at 19 9/16ths is a buy Looking at Gruntal,Montgomery,and Wasserstein we find a range of FY2000 earnings of $.72 to $.78. All of them seem to agree on revenues of $1.5 billion. Target price ranges of 28-40. At 19 9/16ths NOVL is some $2 to $3.75 under 30 times next years earnings. The most significant criticisms offered by Morgan Stanley were that new revenue hasn't appeared for caching and single sign on which were previously touted in conference calls and that their surveys showed netware slipping and that was reflected in only 7% netware domestic market growth rates. They also mentioned Y2K uncertainties for this quarter and Microsoft's marketing machine for the next quarter as negatives. I did not see Morgan Stanley's earnings estimates for next year. But at 19 9/16ths NOVL is priced at 30 times $.65 2000 earnings. THat would be at least $.04 worse than any previous estimates before this last quarters results. This sets us up for a real buying opportunity should NOVL sink further. When we went down to 16 or so it was on rumors of bad earning for Q4. Q4 came in at $.17 plus $.04 in one time taxes. If NOVL sinks in the current selling any further, I have to believe that would be an even better time to buy in again.