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

To: Frederick Smart who wrote (26169)	3/22/1999 12:26:00 AM
From: Paul Fiondella	Respond to of 42771

Here's more of what will make NOVL an addition to investment house portfolios NEW YORK TIMES Sunday March 21, 1999 Communications Trust boasts the best returns among communications funds over the 3-, 5-, 10- and 15-year periods through March 12, according to Morningstar Inc., the financial publisher in Chicago. Last year, the fund returned 85.3 percent, compared with 46.9 percent for the Standard & Poor's telephone index and 28.6 percent for the Standard & Poor's 500-stock index. Behrens, 54, who is still the lead manager for the fund, is a vice president of Alex. Brown Investment Management of Baltimore, which is subadviser to the Flag Investors Funds. Liam D. Burke, 43, has been an analyst for Communications Trust since 1994 and Behrens' co-manager since 1997. The two men say they think alike when it comes to betting heavily on particular stocks. "We're just willing to allow things that we like and understand and grow comfortable with to become bigger pieces of the fund,"Behrens said. The fund holds just 33 stocks, with the top five accounting for close to half of its assets: America Online, 20 percent; SBC Communications, 10.3 percent; MCI Worldcom, 8.7 percent, Ameritech, 4.5 percent, and Lucent Technologies 3.5 percent. (It has not held AT&T stock since 1997.) Behrens and Burke look for companies that have dominant or solid positions in their markets -- and for agile managements that can strengthen customer loyalty and achieve growth amid rapidly changing technology. "If you get a good management team, they can continue to perform and adapt and change and use the technology as you go on," Behrens said. Wireless technology, digitalization and fiber optics are "very, very powerful technological changes" that drive down costs and give consumers vast new choices in communications, he said. One of the fund's Internet-related stocks is Novell, the software company whose prowess in network management makes it a big player in the Internet and telecommunications in general, Burke said. He said the company was in "complete disarray" in the spring of 1997, when it hired Eric E. Schmidt, then chief technology officer at Sun Microsystems, as chief executive. At Novell, Schmidt cut costs and "refocused their strategy into doing a few things very well," Burke said. Those included developing software to solve networks' problems in adopting Internet protocol. Communications Trust first bought Novell stock in September 1997 at $9.50 a share. It closed on Friday at $26.1875.