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

To: Spartex who wrote (22443)	6/4/1998 9:43:00 AM
From: Paul Fiondella	Respond to of 42771

No URL Preferred Capital bought a lot of NOVL. They are just doing their thing. Once they buy the stock they hype it. Now they are lowering their estimates....a possible sign they are getting out.

To: Spartex who wrote (22443)	6/4/1998 10:45:00 AM
From: Elmo Gregory	Respond to of 42771

Hi QuadK - I/B/E/S International EPS estimates for Novell are in line with yours. quicken.excite.com Best that estimates remain low in my opinion. The Street reacts favorably to stocks that meet or exceed estimates but not to those that come in under the consensus estimates. Regards, Elmo

To: Spartex who wrote (22443)	6/5/1998 7:43:00 PM
From: Reginald Middleton	Read Replies (1) \| Respond to of 42771

<I feel Preferred Capital was way off to begin with, and I doubt the large institutions have put faith in their numbers. I'm looking more for 6-7 cents next quarter, and 8-9 cents in the 4th Quarter. So at this point, their 3rd Quarter numbers still looks too rich to me. Even with their revised numbers, Preferred Capital has 1998 annual earnings estimates at 30 cents for Novell, while I believe First Call has them at 22 cents.> I have always had serious probelms with the accuracy of earnings as a proxy for shareholder value. I compared the correlation of about 4,400 companies' earnings to market value over the last ten years and found it to be very low. Depending on the industry, various cash flow measures track market value MUCH more cloesly. In the case of NOVL, the correlation is less than 50% over the last few quarters. Notice how inaccurate the First Call and I/B/E/S estimates were as you look at the results here rcmfinancial.com or here rcmfinancial.com for an example.