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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: Paul Dubsky who wrote (1364)11/14/1997 10:40:00 PM
From: Paul Dubsky  Read Replies (1) of 27311
 
ULBI just released earnings after the close, loss of $.15/share vs expected of a loss of $.20, so it may gain some ground Monday morning. The biigest difference I noticed between their report and VLNCs is the amount spent on R&D for the most recent Qtr. Vlnc spent around $4.2M while ULBI spent only $1.1M. I find this to be a significant difference.

I also noticed that ULBIs price metrics were cheaper than Vlnc's, price to sales of 8+ for ULBI vs nil for VLNC (no revenues reported); price to book of $2.89 for ULBI vs $5.8 for VLNC; current ratio of $6 for ULBI vs $2.5 for VLNC; market cap of $130M for ULBI (on 5M shares outstanding) vs $185M for VLNC (on 23M shares outstanding). These all show ULBI to be priced significantly cheaper than VLNC. Now, how does one read this? Well, if you believe that the market is "perfect" and trades where it should be given the information currently available and expected, then the market expects much better things out of VLNC than it does ULBI since it has such a higher price premium. As a traditional value player, I have a tough time with this. If I didn't know anything about either company other than the stats just noted, I'd buy ULBI. But, these aren't value stocks.

Maybe a good idea to have money in both? More in VLNC than ULBI, of course. But, ULBI looks like a better "value" at these levels.

I DO like the higher R&D at VLNC and the JV/partners their teamed up with.

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