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.

13.5 million at mid price. Must be buys bearing in mind current news position. 758,700 plus dealing charges, could be an institution coming on board. How come they never pay full price. What happened to market conditions for them. They just mention their price and they get it. Prehaps I shall have to become the institution of oilyrag. LOL.

should think it is just stock being moved about at mid price by funds/institutions.

Looks as though Jim Sleter still believes in buying their shares, see RNS re Artemis increased shareholding.

Nice to see all blue today .

Thats because its viyday. Usually goes up on a viyday.

going up bigstyle, now the potential is realised big Oil firms will want a piece

News is good but it needs to hold a nice gain by COB otherwise it will go just go back to where it started. I wish the day traders would leave it alone and let it rise !! What we need to hear are the results of the drilling and if the 2nd unexpectged oil find is substantial as stated in rns then others will defintly want to be interested in the technology. It looks like last weeks big drop was a tree shake in anticipation of this news. Jime Slter obvously had a good idea !

gobsmakingly good news
should be trading 15p+ in decent markets after the run of strong news VIY has had recently, but destined to go a lot higher, with more news still to come,imo.

VIY is rapidly falling off the field in the Shitshare Stakes 2008 (worst performer between VIY, GOO and AMER wins!)

whats the Shitshare Stakes 2008, Cynic? Not heard of that one, is there a thread, sounds interesting!

Given that the small cap index is down about 25% on the year and VIY is modestly up on the year, then I can see they must be doing very badly in the Shitshare stakes.
In fact, would have thought VIY would be in the top 20% of performers for this year, just guessing. Even before todays rise, there was an outperformance from VIY.

it was just a silly little entry i made on the FTSE thread in an idle moment

ok, no problems.
On a quick glance, I see both GOO and AMER have done ok as well, compared to the market at large.
Now TAN or OXB, or plenty of others, they would have been great for the Shitshares stakes, with the benefit of hindsight, ofcourse!

Does anyone know whether a decision has been made by Boeing on the electronic border fence that rumours suggested VOY may have a part to play ??

Presumably traders taking advantage of a bounce as buys & sells split almost 50/50. Drifting off a little now already.

now pulling up again, sellers and weak holders flushed out, buyers moving in.

ViaLogy's seismic technology identifies 2 oil traps at drill site in Texas
AFX


LONDON (Thomson Financial) - ViaLogy Plc. said it has found two oil traps in early oil reservoir analysis at a Texas drill site in first phase of its pilot project with Atascosa Exploration LLC.

ViaLogy's QuantumRD technology for geoseismic applications was used to determine the location and characteristics of the underground oil deposits, which will be prepared for drilling in the coming weeks.

The company said independent analysis revealed that the finding will save Atascosa over $500,000 by relocating the drill site to an optimal location 700 feet from the site originally planned.

Atascosa confirmed that as payment for its QuantumRD work, ViaLogy will receive a no-cost 5 pct working interest in the wells drilled, subject to existing agreements and royalty interest.

Atascosa estimates that this could produce approximately $8 million for ViaLogy over the life of the wells.

From today's Times:

Tiddler to watch

ViaLogy, a company that uses software originally developed by Nasa to amplify data from Mars probes, jumped 1.25p to 6.375p after its software managed to detect a potential gas and oil reservoir for Atascosa Exploration, a Texas exploration company. It will receive 5 per cent of the project worth about $8 million for its services.

it did not say to buy - lol!

seem to remember recently another one to watch was OXB.

We did watch it ... plummet

I'd suggest it's better than being completely ignored.