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.

Heard you the first time.

Heard you the first time.

ooops

going nicely again, yukky me ol' mucker, where are you when we need you?!!!
probably, ahem, attending to those shorts of his.

I think the 3 mil x trade could be a buy .

2007-09-18 12:05:00 Buy 3,000,000 9.38 281,400 9.25 9.50 Cross at same price

any more of yukky's incisive comments?
come on, lets hear you!

Results due 30th sept .

the figures, or more precisely the accompanying trading update certainly needs to be good with a firm indication of when the company should move into profit if yukky is not to be justified in saying "told you so!"

the rns better be good next week or this is going
d
o
w
n bigtime

lol!
yukkys back, can only mean one thing, we're going up again!

Todays RNS confirms comany's products will be released in October. Appointment of new CEO looks very positive.

I agree with Halifax. I don't think somone of Robert Dean's calibre would take on the job of CEO unless he believed in the company's future. This is one company where I feel patience will be rewarded - the new CEO has all the right contacts if you read today's RNS. Just hold tight!

unfortunately, if VIY do not start to look profitable or at least heading that way in the very near future, the market will lose patience and punish the stock accordingly ..... it was prob too much to expect a trading statement today, but there sure needs to be something very positive when the results are declared

'We are delighted that Bob Dean has agreed to accept the most senior management
position with ViaLogy,' said executive chairman, Terry Bond. 'He has the
experience and vision that makes him the ideal person to lead us at this
exciting time in the company's development. Our technology has now been
validated for a number of important industrial applications. Next month,
October, we will be announcing and demonstrating ViaLogy's commercial products
for defence, oil and gas and enterprise management and business continuity
applications.'


Said Dr. Dean: 'During the time I have served as a non-executive director of
ViaLogy I have been very impressed by the potential of the company's technology
and products and the abilities of its staff. I look forward to growing the sales
and marketing organisation and deploying ViaLogy products for partners and
customers in the US and globally.


'I am confident that ViaLogy will achieve the success in the market place that
its unique technology deserves.'

nice!

says nothing + nothing about current trading nor prospects of profitability

cynic, u loking for profitability u are looking in the wrong place!
this is a development company moving into commercialisation, for gawds sake, get real!
suggest try ftse 100 co's are something, think they make profits and pay a divi

if profitability is not visible, then i am quite sure you will find the market will smack sp, as although it is well off its highs of about 14p it has still doubled in the last year ...... this cannot be warranted without tangible progress towards profitability.

You cannot expect profits before sales--- commonsense!! What you have to look for is the reception their innovative products have in the market. Forthcoming results are historic, it is the potential that matters. If these products are not received well by the nmarket then cynic will be proved right, if they achieve instant recognition then cynic will wish he had bought into the Jim Slater story!!