Robert, at the time, when I bought ULBI, it was selling under book (almost under cash), it had a long pattern of basing, the "penalty" for the loss (fire) of their British operations fully reflected in their price. Their survival did not depend on the success or failure of the Li-polymer batteries, yet they had the potential to participate in this future market. Because it is thinly traded, it is not a very good candidate for trading (but you can still do very well trading it). As for performance, they are shipping both Li-polymer and Li-ion batteries, the latter is a steady growing business for them, and they should break into positive cash flow with 12 to 18 months.
As for commenting on it, I have made few comments on the ULBI thread, and avoid discussing it on the holy tread for "obvious" reasons. I never made any strong "buy" recommendations since it is quite a risky situation were a lot of things could still go wrong. Yet, at the time, the "BV" served as a very nice floor for entry. With the holy one, because of the major commitment and the lack of financial depth, a lot could go wrong. You have to have a lot of faith that Murphy is going to stay away, and my experience has been, he never does.
Frankly, I do not know which of the two is a better long term investment. The fact remains that when ULBI needed money to support their current spurt of growth, they could go and get $20 MM of straight debt financing (not from the like of CC). I sure was not going to make a LT commitment to a company financed with a floorless. Their market cap at the time was about 25% of the holy's market cap (it still is), and unlike the holy one, they had sales and these sales were growing sensibly. Right now, their chart is bullish while the holy chart is very earish. Will I sell ULBI, sure I will, my original target was $20, and if we reach this target I will reevaluate my position again. If we don't, I still have a stop loss at $7.5 (which will be raised if the $16 level is breached) which yields more than 50% gain.
I think that ULBI's approach to entering the Li-polymert business, while not having the huge potential that the holy one has, is much safer and will not involve possible threat to their corporate life. It is much less of a bet than the holy one and thus belong to the core.
Finally, I did much better trading the holy one than the "buy and hold" approach I have taken with ULBI (but I am not complaining, it is 160% ahead), but the game is not over on either of those.
Zeev |
