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

To: dwight vickers who wrote (22116)	5/19/1998 11:32:00 AM
From: m thompson	Read Replies (2) \| Respond to of 42771

good mention for NOVL from DJ newswire May 19, 1998 SmartMoney: Street Smart - Telephone Operators: The $872 million Flag Investors Telephone Income fund is the top-performing communications fund of the past Dow Jones Newswires This story appears in the June issue of SmartMoney magazine. By Kevin J. Delaney THE MANAGERS BRUCE BEHRENS, 54, has managed the fund since its inception in January 1984. Liam Burke, 42, was named co-manager in April 1997. The fund's adviser is Alex. Brown Investment Management in Baltimore. HOW IT GOT TO THE TOP The fund owned some of the best stocks in one of the hottest sectors in the past year: telecommunications. Its top holding, regional Baby Bell SBC Communications (NYSE: SBC), posted a gain of 65 percent. WorldCom's (Nasdaq: WCOM) acquisition binge further boosted the fund's gain with a 96 percent return. But those highflying numbers pale next to the performance of the fund's less conventional communications picks. Mobile Telecommunications Technologies (Nasdaq: MTEL), a wireless messaging company, is up 258 percent over the past year, thanks to a turnaround in its SkyTel paging business. America Online (NYSE: AOL) netted the fund an additional 221 percent. Surprised to see an online-service provider like AOL in a telecom fund? The fund previously invested at least 65 percent of its assets in telephone securities, but now includes the broader communications sector. WHAT IT'S BUYING NOW Comsat (NYSE: CQ), which provides satellite services to telephone carriers, broadcasters and the U.S. government, is underappreciated given its dominant market position and recent management changes, Behrens says. The company is up 50 percent since he and Burke began buying it earlier this year at $23.50. They got the idea to invest in networking-software company Novell (Nasdaq: NOVL) from a telephone company: U S West Communications raved about Novell's products. WHAT IT'S SHUNNING The duo sold Motorola (NYSE: MOT) because of signs of weakness in the electronic giant's paging and cellular businesses. Noticeably absent: AT&T (NYSE: T). The managers last summer ditched their remaining stake in Ma Bell at a price of about $35. A premature move, perhaps, since the stock is trading at $65 now, but they lacked confidence in AT&T's management and were concerned about increasing price competition. OVERALL PHILOSOPHY Behrens and Burke like to get in early, when stocks are undervalued, and then stay put, so turnover in the portfolio averages a low 20 percent annually. And they're selective: Their top 10 holdings account for 63 percent of assets. "We don't feel like we have to participate in anything until we're comfortable with it," Behrens says. Briefing Book for: AOL \| CQ \| MOT \| MTEL \| NOVL \| SBC \| T \| WCOM Format for printing Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved.