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Technology Stocks : Reliability Inc (REAL)
REAL 12.56-7.9%Feb 5 3:59 PM EST

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To: darren_ who wrote (5)12/23/1996 12:47:00 PM
From: Christopher Brainard   of 542
 
Darren, If low DRAM prices are keeping manufactures from adding new capacity then demand for new testing equipment will suffer. But REAL does more than make equipment, they test DRAMS as well. From their recent reported numbers (past 2 years) my guess is that their DRAM testing operations are generating $0.12 - $0.16 per quarter in earnings and most likely these operations are growing. Any income over this level is coming from selling test equipment. This would mean their base earning potential is $0.60 - $0.65 annually from testing alone. You can own this earnings stream for 10x and pickup the earnings from selling test equipment for nothing at all. Time will tell but someday this stock will be discovered and those who waited will be rewarded.

Chris ...
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