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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: jim heger who wrote (4608)	10/29/1998 10:34:00 AM
From: FMK	Read Replies (1) \| Respond to of 27311

Laptop potential sales figures> It is my opinion that before too long the company should bring line 1 up to 8000 good batteries per day. If line 2 for some reason becomes set up for laptops, it is believed capable of 20 per minute or about 26000 x per day x 80% yield. Add these two together and its 34,000 per day with a likely selling price over $65 each. 28,000 x $65 x 350 days/year = $637,000,000 per year potential revenue from two production lines. To estimate earnings, a conservative 30% yields $191,000,000/28 million diluted shares equals $6.80 per share potential earnings from the first two assembly machines! Add a high speed cellphone line at 16 million good batteries per year x $10 each x 30% and you have another $1.70 per share earnings! This totals $8.50 per share for 3 production lines or about $2.75 per line! Let's back down and assume they will only attain 90% of this and it takes 8 months to get there starting in December. For next year it would be possible to then earn about $4 per share allowing for time to ramp up. By that time more production equipment should be in operation plus joint venture income should show up on the bottom line. $4 per share x 20PE indicates an $80 share price! (Sound familiar-remember Don W?) Am I too optimistic? Then lets discount all this by a factor of 2. For a fast growing company a 20 PE is probably conservative and $40 per share would be indicated. Still a terrific return. I believe odds have improved since I last estimated chances of failure at 0.2%. That leaves upwards of 99.8% probability of success. The 525,000 shares of insider buying plus the 2 million share plus volume on Monday and Tuesday would tend to confirm my thinking. The buyers have been patient yesterday and today, waiting for more sellers to become impatient. IMO we should hang on to every share and accumulate if we can- especially before the inevitable contract announcements.