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

To: Joe Antol who wrote (18691)	11/26/1997 4:33:00 PM
From: Salah Mohamed	Read Replies (7) \| Respond to of 42771

Hi Joe....About Q4 Results Q4 numbers are a surprise for sure. The main surprise is in revenues, they came up with 50M increase in revenues over normalized Q3 revenues. My position still the same, I don't own the stock and don't plan to own it in the foreseeable future. My evaluation and views haven't changed much from my Post #14205. In that post I basically predicted that revenues will stabilize around 270M, however Q3 numbers muddied the picture and with Q4 results we are back to where the overall situation is about the same as described in Post #14205. Clearly, there are some considerations to be factored in since that post (late June 97), unfortunately, all of these are negative, here they are: 1. Resignation of Denice Gibson 2. Delay of Moab from 12/97 to mid 98, this will give MSFT the chance to freeze the market with NT5.0 release around the corner. 3. No change of the BOD 4. Insiders are selling 5. BorderManager sales are not hot, 27M in Q4 vs my expectations of 30M, not 1.0B product as the company stated 6. Revenues for Q1-98 are flat or slightly less than Q4-97 7. It is not clear whether there is channel stuffing or not, I thought they said after Q3 results were announced that channel inventory is 45 days, now they are saying they will try to get at 45 days or less and the DSO is 79. How are all of these jive together?. I don't know, and I will leave this one to the guys who own the stock to figure it out. 8. No products to address the low end 9. Marketing hasn't improved much 10. They lost money on operations in Q4, 5M-6M The three scenarios discussed in Post #14205 still are valid with a tilt towards the stagnation scenario which was quoted by Paul in a recent post. Without trying to dampen any enthusiasm for the stock, let's get realistic here, analysts consensus estimate for 98 is $.30. If you give this stock a PE of 30 which is generous, you end up with $9 for stock price. Or one can say it deserves a PE of 20 plus cash, and this is also comes to $9. At $9, the stock is selling at about 3x yearly sales which is reasonable considering the problems they are encountering at the present time. Joe, this clarifies why I sold all my shares when the stock spiked to 9 3/8 in early July 97. I understand that you finally got out of this stock, good for you. And Irene, my predictions for Q4 were wrong and I apologize if I misled anyone, but I would appreciate it if you can tell me how to improve on my lousy prediction capabilities <smile>. Happy Thanksgiving to all Regards Salah