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: Spartex who wrote (21591)	4/8/1998 1:36:00 PM
From: E_K_S	Respond to of 42771

Hi Quad - Yes I still own 500 shares down from 5,000 which I sold late last year. I do not expect Schmidt to pick up a COO soon but rather it may be over six months based on the companies past track record. I continue to own this company for the turn around and to achieve some exposure to the growing networking (software) business. The balance of my Novell proceeds were used to buy Sunw and CPQ. Both companies have shown good returns in the month's I have owned them but my expectations are three to four years out. Here are my expected price targets on each: Year: 2000-2001 1) Novl: mid teens low twenties but it really depends on if and when a solid management and BOD is installed. Then start the 24 month clock to see the results. 2) SUNW $78.00 by 1999-2000...The market will be surprised by the free cash flow that their storage business generates. If this occurs then $100 target is not out of line. (Both EMC and STK continue to hit new highs as enterprise networks require high end storage solutions). Their server business continues to grow over 20% per year and the JAVA product (including embedded systems) is well...just gravy at this point and not a factor in my valuation. 3) CPQ $100 by 2000-2001...Watch CPQ generate most of their revenue and growth from their service business. I see them growing their service business 20% per year for several years. Hardware sales will be less than 65% of their revenues by 2000. ====================================================================== You can see that the central theme in my networking investments are focused on new and growing revenue streams. This is accomplished by growing service revenues, selling new products that can generate huge free flow cash flows, and participating in the overall industry growth. I guess Novell is my sleeping dog that if managed correctly all of these criteria could be achieved. At this point they do not have the management in place or company goals to meet any of these objectives. Maybe 1999 will be different. EKS P.S. Quad - Just read the last two years 10K reports, look at the negative revenue growth, and the significant decline in the free flow cash flows for Novell. This turn around is still headed downward and next quarter numbers (IMO) will be no different.