Thanks for the NOVL info Ken, might have to take a ride to the big city and purchase a copy<g>..IMO, if Wall streets warms up to the stock(after basing for mulitiple years), things should look rosey for 2000. From what I've read and been able to understand(NOVL thread is to technical for me to understand<g>)..they have a better mouse trap than MSFT.Will that be enough? I'm betting it will be...;^)DD
PS: IMO, the key is the ability to work over mulitple platforms,Linux,Unix,and MS,,,MSFT's only works with MS platform..through in caching,directories, border etc...and we shall see...
woodstove is loaded up, back to bed for me....
""Another Favorite
Another favorite stock of mine will come as no surprise to readers of this column.
I have been bullish on Novell (NASDAQ: NOVL - Quotes, News, Boards) for the past few years. Novell is essentially a B2B company, a real facilitator.
As it continues to execute and the Street catches on to CEO Eric Schmidt's vision, shares will make new highs. While shares have come to life recently, surging into the upper-$30s, the best is yet to come.
While I made the analogy between Trimble and Qualcomm, I am not sure what highflying software stock to compare Novell to. So instead I'll use a sector.
Novell is a leader in B2B software. It is the dominant provider of operating software to Fortune 1000 companies.
Novell is also a leader in the directory services market, a kind of electronic Yellow Pages that keeps track of all data stored on servers--crucial stuff for network administrators.
According to International Data Corp., this market is exploding, with estimates calling for $5 billion in revenue in 2000,a five-fold increase over the past two years. Novell's product for this market is called NDS, and is compatible with multiple operating systems, such as Linux.
Novell has a tremendous installed base and tons of innovation. Expect the company to continue to introduce new products and plow them through their installed base.
In an environment of huge valuations for software companies, Novell is cheap. Novell is an innovator, a company on the cutting edge. Yet, it trades at only 30 or so times next year's earnings estimates."
iiadmin.individualinvestor.com
If you are interested, well worth reading "fingertips" posts at the indvidual investors board...
Here is an example of his postings
"< Previous New Message Reply Message List Next >
More Thoughts on Price Targets 12/30/99 6:48:23 PM
By: Fingertip
Well, back when Novell was in the teens, I came up with a one-year price target of 38 1/2. It was calculated as conservatively as possible, because I wanted to be sure I could defend my view that Novell's price was ridiculous down there without making any rosy assumptions, and thus have the backbone to pour a lot of money into Novell.
Now that the market is warming up to Novell, I feel I need to calculate a more generous price target, in order to get a feel for where this stock could go.
I'll take a basic P/E approach. Consensus estimates say Novell will earn $1.00 per share in the 2001 fiscal year (November 2000 to October 2001). II's Magic 25 writeup uses a high-end estimate of $1.10 a share. I'll base my calculation on the 2001 fiscal year, because as we progress through 2000, this is what the market will be focusing on.
So the question becomes, what P/E does Novell deserve? Consider that the Nasdaq as a whole now sports a P/E in excess of 140. If you exclude the companies that are losing money, it still sports a P/E over 40. Since Novell is much better than the 'typical' Nasdaq company (in terms of management quality, product pipeline, strength of their proprietary technology, market position, earnings consistency, balance sheet, and other such considerations), we can't use a P/E of less than 40, and probably should use at least 50 (a small premium to the overall Nasdaq).
So right away, we have to say that on the basis of 2001 earnings, Novell is worth $50 per share, assuming 2001 earnings of $1.00 per share. If we use $1.10 per share, then we arrive at $55 per share.
Now, this is about a 10-month price target (start of the 2001 fiscal year). So this argues that Novell should find its way north of $50 per share by October or November.
What if I get a bit more generous, and assume some P/E expansion? Let's say the market begins to view Novell as an Internet infrastructure company (which is justified since Netware 5.1 is being positioned as a Web server platform, NDS is needed and increasingly being used all over the Internet, ICS is finding its way into every box-maker's Internet caching appliance, and new products such as I-Chain and Digitalme also fit the Internet infrastructure bill).
Here are three established Internet infrastructure companies, and their current P/E's on next fiscal year's earnings:
SUNW: 79
ORCL: 89
CSCO: 94
OK, you're probably saying Novell is no Sun, Oracle, or Cisco. So what forward P/E does Novell deserve? 60? 70? Here's our price target at various P/E's, assuming $1.10 a share in fiscal 2001:
P/E of 50 gives a price target of 55
P/E of 60 gives a price target of 66
P/E of 70 gives a price target of 77
P/E of 80 gives a price target of 88
Again, these are 10-month price targets. Barring a major problem at the company, this exercise makes it hard for me to see how Novell could be less than $50 a share 10 months from now, and makes 75 or 80 believable.
Accordingly, I think I'll keep holding a while and give Novell some room to run... "
and his posting profile
iiadmin.individualinvestor.com
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