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

To: BJP1946 who wrote (18724)	11/26/1997 7:40:00 AM
From: hoffy	Respond to of 42771

Looks like it will open unchanged from yesterday: Wednesday November 26, 7:19 am Eastern Time U.S. stocks in London mixed, golds lose shine LONDON, Nov 26 (Reuters) - Commodity-sensitive companies, such as oil and gold, highlighted trading of U.S. stocks in London Wednesday ahead of an expected firmer Wall Street open. The Dow industrials, which finished 41.03 points higher on Tuesday at 7,808.95, were expected to open about 20 points up, based on stock index futures trading, dealers said. December S&P futures gained 3.2 points in Globex trading by 1150 GMT, while U.S. long bond futures slipped 10/32. Trading was quiet, however, as investors will have to digest a plateful of economic data and U.S. financial markets are closed on Thursday for the Thanksgiving Day holiday. ''The market is bouncing a bit on the non-Asian sell-off and the techs are also looking a little better,'' one London dealer said. ''I would expect (the Dow) to be about 20 points higher.'' Shares in gold companies edged lower with a drop in the gold price to under $300 an ounce in London, the first time in 12-1/2 years it has fallen below the psychological $300 level. Concerns about the sales from central bank reserves have hammered the gold market all year as European governments jockeyed for position ahead of the establishment of the European Central Bank (ECB) and European Monetary Union the next two years. Shares in Barrick Gold (NYSE:ABX - news) slipped $1/4 to $16-3/4 and Echo Bay Mines (AMEX:ECO - news) fell 2/16 to $2-9/16, dealers said. Leading oil company shares recovered some of their lost ground in New York that was blamed on a drop in world oil prices. A report on U.S. oil inventories and OPEC's meeting in Jakarta, where Saudi Arabia is trying to build a consensus on raising the group's production, weighed on crude prices. Exxon Corp (NYSE:XON - news) shares edged up 1/4 to $61-3/8 and Atlantic Richfield Co (NYSE:ARC - news) gained 5/16 to $82. Elsewhere, Novell Inc (Nasdaq:NOVL - news) shares were unchanged at $9-7/32, dealers said, even after the software company reported better than expected profits for its fourth quarter. Novell said net income for the three months to October 31 was $7 million, or two cents a share, one cent above the consensus of Wall Street analysts, according to First Call.

To: BJP1946 who wrote (18724)	11/26/1997 9:18:00 AM
From: Don Earl	Read Replies (1) \| Respond to of 42771

<Are you sure that you are looking at this the right way?> Possibly not. They do account days inventory in the channel and in house inventory separately. All inventory shipped to the channel is counted as revenue regardless of sell through to end users. At the end of Q3 channel inventory was "less than 45 days" and "the lowest level in 10 years". Now they say they are "fully geared" to bringing down inventory levels to 45 days or less. I don't see how it can be read any other way than; there is more inventory in the channel than there was at the end of last quarter. I don't really think they tried to stuff the channel to make the numbers. I do think they shipped what they thought could be sold and couldn't sell it. If "reduced days sales outstanding to 79 days at the end of October..." refers to something besides channel inventory, then I used the wrong number in my figures. In the context of the article, I understood the numbers to be refering to channel inventory. If that was a mistake on my part, feel free to correct me. I've worked hard to understand as much as possible about Novell but that doesn't mean I have all the answers. My long position through out most of Q4 was based on the belief that 300 million should be the bare minimum. When I became convinced that, along with other factors, marketing was not up to the task and that 300 million would be virtually impossible, I bailed and went short. I haven't double checked to make sure but I believe cash dropped in an amount consistant with my estimate. My game plan was based on a loss of around -.04. I figured I could trade or exercise my puts in the low 6s. Go long for a dead cat bounce to 7, take a profit and say goodbye Novell. It didn't work, but it looked great on paper. Plan B is to hold the puts until the gap left at 8 1/8 fills and I can make a little profit or break even. Regards, Don