You know what, we are all right, right in the sense that it is taking a long time. But that is the nature of the industry we are playing in. We are accustomed to the fast pace of the high tech industry where new products and visions are good for only 6 months, if that long. When Eugenetuck bought in at 21 1/2 the hope was for fast profit and growth, and the fundamentals for OE was not as good as it is today. What I mean about fundamentals is the progress of the business development as apposed to any earnings or top line growth (revenue). The stock was trading on promises and license purchases which do not guarantee production, implementation (ie. Ford, OMC, Piaggio etc.). What we have today is solid evidence of present and future implementation of the technology (ie. Mercury Marine, Bombardier, Tohatsu, Siemens JV, Maleo on hold however real money was infused into the venture, Morgen Glenfell infusion of monies to enhance the marketing of marine products). Over time since OE's IPO the stock market focus has changed, the world financial conditions have also changed, there is more competition for investment dollars with all these forces the price of the stock will be impacted. The question we need to answer now should regard the potential success in the four stroke engine market. Should the news be positive in that a high profile automaker does decide to go with OE, will the stock price rise and stay on a growth path? That will depend upon the commitment described in the news release. Any vague notions of a questionable commitment could be hazardous. For me, I believe that there is a better than 50-50 chance that the news will be good in terms of commitment. The chances of a 4 stroke victory are excellent. If OE did not JV with Siemens for production I probably would not have stayed in the stock. The announcement came in Feb. '97, however I knew about the ongoing discussions I believe a year before, if my memory serves me, when OE was in Southern California on a US tour. At the meeting they mentioned the talks. As long I have been in the stock, there has not been anytime they said anything that did not come true. Business conditions change that are not in OE's control, ie. Maleo, Asia markets. The most important factor to any investment are the skills of management. And they have demonstrated high ability to function in a global market arena battling for the attention and commitment of customers who have the powers to make it a successful venture.
I am on "pins and needles" awaiting the news. But I feel comfortable because of my simple phone call to Ms. Saling when she confirmed that the talks are ongoing and they have progressed, and that an announcement is due out shortly. I did not need to know when, even though I would like to have had her tell me which I knew she could not. This is no different when I was waiting for the news on Siemens J.V. It took longer than I wished, but when I called I was assured that things have not fallen through.
You need to recognize that OE is a small engineering firm that specializes in a very narrow field. It is not a company that has a broad service and product line like some of the companies you read about in the financial press. You can not evaluate the future potential of OE as you evaluate the potential of large well diversified firms. Management has proven to be highly focused on a strategy to bring the fuel system technology to market. Many people, and I mean the stock market players, do not know the significance of the technology or have doubts about its commercial value and success, otherwise it would be getting more press coverage. Ask your friends who play the market if they know who OE is. I believe you would see a face with a blank look. If you know now who OE is and are convinced the technology has value, and then should that technology be proven successful (ie. high stock price, dividends), your friend will get his confirmation from the press and will then buy the stock at a much higher price while you pleasure yourself with a highly leveraged (extreme low stock price)position and wondering if you should ever sell. |
