MORE ON SOLID INFORMATION VS. HYPE AND MARKET TIMING.
Alex- I am directing this one at you because you mentioned you were performing a "due diligence" in an earlier post. It should mean that you are a professional analyst and I invite your comments on what I say here.
I understand that a due diligence is a summary of carefully-collected facts regarding a company. This document helps as insurance against lawsuits when a brokerage firm recommends a stock to clients or when a fund acquires a stock. It usually involves an inspection of company facilities, and serves as a record that the investment decision was based on more than a hunch.
I have been doing my own "due diligence" in the context that I have been collecting information from many sources and as you are aware, have posted my thoughts and have invited scrutiny. Admittedly I lack the certainty of seeing the production facility for myself, holding the product and an OEM contract in my hand, or viewing evidence that a customer such as Motorola or Hewlett Packard is paying their bills.
As we know, Valence was not a small disappointment a few years back after having to "go back to drawing boards". When I spoke with analyst Peter Barry, who has been to the Ireland plant and followed the stock for C.J. Lawrence, he told me that he had not kept up to date and that Valence was on his back burner. I told him about the four production lines on order and startup of the first line in the first quarter. Not that our converstion had anything to do with it, but I heard since that he will be among the group visiting the Plant next month.
I was told Institutions such as Montgomery Securities, who have recently assigned an analyst to Valence, would likely accumulate stock (unsolicited) for clients and a portion of their own portfolio before announcing buy recommendations. I was also told last week that representatives of two large institutions were aggressively acquiring information about Valence.
My point is that much of the big money is still waiting for analysts reports. A mutual fund with 1000 investors has the potential for 1000 lawsuits.
Regarding the hype question- We know the stock was $25 last time when production was being started for the Motorola contract. Thanks to Matthew Leo we can readily confirm that world demand greatly exceeds supplies for Lithium ion batteries. The $40 Million the Koreans are investing and the Alliant Tech announcements confirm that the batteries work. And when you are dealing with Hewlett Packard, Motorola, Alliant Tech etc, you are past little league!
As mentioned earlier, the company has been reluctant to announce their recent progress. They have only answered specific questions and are content to just go about their business. I was told to expect the same low-key profile during wednesday's conference call.
From my conversation with Alliant Tech I recall that they are also the largest supplier of Artillery fusing, which requires batteries. Weapons such as were used against Iraqi tanks in the gulf war are about 2/3 electronics inluding seeker and sensing circuitry. In view of their joint venture with VLNC, what kind of batteries do you think Alliant will be using?
My best regards to all of us who own the stock! |
