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Technology Stocks : Reliability Inc (REAL)
REAL 14.67-5.0%Jan 30 9:30 AM EST

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To: james r. davila who wrote (79)7/22/1997 9:42:00 AM
From: Christopher Brainard   of 542
 
James, I got into this then unloved/unappreciated puppy just over a year ago at $6.50. Even then the company had over $1.00 per share earnings in the bank and was selling at a PE of 6. Boy can the market be really stupid!

The best part of our current situation is that even at $21 the stock is still very reasonably priced. Trailing 12 month earnings are $1.63 and our PE is only 12.9. The company stated that next quarter should be as good or better than this quarter. My guess is that full year earnings should easily exceed $2.25.

The stock has a way to go to reach just a reasonable valuation. Based on its recent run, the momentum boys are likely to jump aboard this speeding train. If this happens the stock price is SURE to get above reasonable valuation. This would be the time to sell.

In my opinion reasonable valuation for the stock is now $2.25 earnings times a 15 PE or a $33.75 stock price.

One finally comment about the 2nd quarter earnings report: "WOW"

Chris ...
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