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

To: dwight vickers who wrote (24468)	11/24/1998 9:33:00 AM
From: Spartex	Respond to of 42771

Stocks in Focus Nov 23 1998 5:53PM CST Novell Inc. (NOVL)-- Investors Anticipating Good News on Tuesday and In the Future by Mark W. Draud Sr. Investment Research Analyst I wanted to focus on a technology stock that has quietly soared to new 52-week highs the last 5 days in a row-- Novell Inc. (NOVL). According to S&P MarketScope, NOVL "provides standards-based network software for intranets and the Internet. The company's network solutions integrate information resources and provide necessary network management, messaging and groupware capabilities for customers worldwide." The market capitalization for NOVL is about $6.3 billion. NOVL incurred some losses in the April and July quarters of fiscal year 1997, but since then the earnings numbers have increased from quarter to quarter ($0.02, $0.04, $0.05, $0.07). The company is expected to release earnings for its fourth fiscal quarter of 1998 (ended October) tomorrow (November 24), and some good numbers are expected. The nice rebound in earnings this year and expectations for impressive numbers tomorrow (and in the future) have resulted in big gains for the stock. The average estimate for the fourth quarter is $0.09/share, versus $0.02/share in 1997. Analysts are looking for $0.25/share for the full year 1998, versus a loss in 1997. In the last 4 quarters, there have been 3 "positive surprises" and 1 report that matched estimates. The average earnings estimate for the FY1999's first quarter is $0.08 versus $0.04 the previous year. The earnings estimate for the next fiscal year (ending October 1999) is a gain of 84% over 1998. The 5-year projected earnings growth rate is 15.6%. At today's closing price (18), NOVL is trading at a 39 p/e ratio, using next year's projected estimate. It looks like investors are expecting NOVL to continue to beat the estimates. Of the 8 analysts polled by Zacks who gave an opinion on NOVL, 1 rated it a "Strong Buy", 4 rated it a "Moderate Buy", and 3 rated it a "Hold". Next we will look at a 1-year graph for NOVL. The 52-week low was hit on January 27 of this year 6-7/8, and NOVL made an excellent advance to a high of 13-1/2 on July 16. It fell along with the market, and made a low at 9-1/2 on August 31. What a recovery it has made from there! It blew past the July highs in October, and really started accelerating 5 days ago. As mentioned above, NOVL has set new 52-week highs for the last 5 days, and volume has been much higher than average each of those days. Today it rose 1-3/16 to 18, on a fat 13.9 million shares. So NOVL has advanced a whopping 89% from its August low! The next resistance for NOVL could be at 19, then 21, then the 22-23 area, then the 25-26 area. The all-time high for NOVL was set at 35 on March 12, 1993. Disclaimer: Please note that the purpose of this article is NOT to recommend that you purchase this stock. Furthermore, the author does not own this stock. The article is written to inform you about a stock that has made an impressive recovery from its lows. The purchase or sale of this stock (or any investment) should only be made after a thorough analysis of its merits and risks, and how it fits into your overall investment strategy. wallstreetcity.com