from w-w-bb:

19.01.2007 - Total Rocketscience

The third and final company making up our Risk / Reward trilogy on shares for 2007 has so many investment negatives that most observers might not even give it more than a cursory glance. Although quoted on the London AIM market, it is based on the other side of the World, has reported revenues and cash flow of diddly squat and, more importantly, operates in an area of expertise so deep in boffinland that you need to be at least a 5 star techie to venture anywhere near it.

What originally persuaded us to give it a second look was the fact that legendary Stockmarket investor, Jim Slater, was pouring money into it via several successive rounds of financing. As we all know, Mr. Slater is a qualified accountant and hugely experienced corporate financier but clearly he is more at home in leafy Surrey than in the technologically rarified atmosphere of Southern California. However, he must have gleaned enough about what the company actually did to get extremely excited about it. In fact, by last Autumn, he had grown to like it so much that, to paraphrase the immortal Victor Kiam, he bought the remaining 51 % of the company that his vehicle, Original Investments, didn't already own.

The company in question was VIALOGY and, ever since it was fully reversed into Original just before Christmas, Slater's loyal band of followers have seen their highly speculative penny punt move on to the calculated risk category and been duly rewarded with a 50% shareprice improvement. We first latched on to this situation last April when we wrote a piece entitled The Cisco Kid ( see news archive ). To recap briefly, the company was set up by some brainboxes who had earlier worked together on supercomputing projects for NASA. Led by Dr. Sandip Gulati, the team appeared to have perfected software to detect and enhance extremely weak signals previously obscured by background noise. This may not seem particularly earthshattering to the layman but, apparently, the applications for this technology are not only revolutionary but almost limitless which suggests that an exponential rise in licensing income could well lie ahead.

Big news clearly travels fast on the Eastern seaboard because global behemoths Cisco and Boeing have already enlisted Vialogy to work on 2 major government inspired projects and these are just the ones that the company have been allowed to talk about publicly. As we reported in April, Cisco has contracted Vialogy to help with its IPICS programme which seeks to make sure that all emergency services and government agencies can communicate with each other quickly via computers and phones. The need to address this obvious requirement was highlighted by 9 / 11 when communications between different departments with different systems proved chaotic.

For its part, Boeing has recently confirmed that Vialogy has delivered a tenfold improvement in the accuracy and efficiency of the types of gyroscopes it uses in spacecraft and missile navigational systems. It is also known that both Cisco and Boeing see a major role for the technology in such areas as border controls and missile defence systems. Elsewhere a much smaller Texan company, Evolution Petroleum, is applying the technology to improving seismic evaluation of oil and gas deposits.

This initial clutch of applications is almost certainly just the tip of a very large iceberg that is going to float into view over the next few years and all that is required is a little patience. At todays price of 5.5p, Vialogy is valued at a mere 22m. To justify this valuation, the company would have to be earning say 2 million pretax. With cash reserves of 3 million and its heavyweight partners funding the projects it is involved in, Vialogy should be able to get through to breakeven without further recourse to shareholders. We would expect this stage to be reached sometime over the next 12 months. Thereafter, profits could / should escalate very dramatically as new applications and licensing income start to snowball.

On a two year view, shareholders could be rewarded extremely handsomely indeed. Vialogy is in so many ways akin to last weeks selection, CORAC. Both are now moving from the development stage to commercialization with the scales tipping away from blue sky risk towards the reality of cash flow. Both have mindblowing upside potential yet both have current shareprice action that makes drying paint look positively orgasmic. Although this presents an opportunity for latecomers, it is a frustrating byproduct of both companies involvement with highly sensitive technology and powerful, publicity shy partners. Moreover, the present lack of any meaningful numbers together with the sheer scale of future potential makes any serious stockbroker research well nigh impossible. All this will resolve itself in due course but, as they say in the Grolsch advert, all good things come to those who wait.

notlob you must be a bit sad being 40% down on viy, yes we know you bought at 4p so dont go on about that again, when its back at 4p thats when you will be bitter and twisted thinking about how you could have sold at 15p like most of the wise people in viy,their gain is your loss.

yukkey, you fool, its called run your winners, and VIY is up well over 100%+ for me (more like 140%+ actually) with plenty more to come.

sounds like you can only repeat my post back to me!
run out of words? (and money!!!)
tyring saying something original, but I assume thats too much for your pea-brain.

why don't you two start up your own thread ..... it's like Punch & Judy ...... but who stole the sausages?

cynic, watch out that the crocodile don't come along and eat you all up!!!
thats the way to do it!

Dr. John Mai, ViaLogy's Manager for RFID Platforms, said: 'ITRI has
relationships with the major technology-related businesses in Taiwan. This
collaboration will accelerate adoption of SPMTM for large-scale industrial
applications. We are already working on integrating innovative sensor solutions
being developed at ITRI to quickly expand and scale up its installed-user base.'


Dr. Wu Chi Ho, Director of the Power Control and Sensing Application Technology
Division, of the Energy and Environmental Research Laboratories within ITRI,
commented: 'We believe ViaLogy's SPMTM and MicroSPMTM platforms present
exciting solutions to fill gaps in our development and commercialisation
process. Their IP-enabled sensor interoperability software offers us a path to
rapidly bring our infrastructure monitoring projects to enterprise-level end
users in the oil and energy market sectors, both within Taiwan and
internationally.


'ViaLogy's ability to add new sensors and support new network interoperability
protocols within 72 hours is very attractive for our scaling requirements

markets in a strong rebound today yet viy is down again, 7p on the horizon

VIY moving up, next stop 20p.....

viy tried to move up, and came back down again, cant even sustain a tiny rise for more than a few hours, next stop 6p.

I would settle for 8p like the institutions.

500p

i would settle for this thread becoming sensible along with the markets!
if VIY (the company; sp will follow) can actually show proper progress by the end of the year, that will be a bonus, though i have no idea how realistic that timescale might be.

Yukio, if you keep guessing eventually you will probably be right, if the price falls.

sells outnumber buys 3-1 today so this is clearly not being seen as a bargain buy notlob just think you could have sold these at 15p sell now whilst your still in profit if the next results are a disapointment its gonna go back to 4p.

P

P

Pse correct me if I am wrong but I dont think VIY has produced results for year ended 31/3/2007 yet. It appears to me that these results will not show much in the way of sales as they have stated they will launch some commercial products in autumn 2007.

How successful their commercial products prove to be will not become apparent before the end of 2007 at the earliest.

if that is so, then the trading statement accompanying the figures will be particularly important

You can buy under the magic 8p !

i can see this going all the way back to 4p

A lot of buying around 7.25p and the sp has gone back up .