I don't pretend to know what fair value is for stocks like this is. But my take on this is that as a future profitable company, it would be very cheap (based on other tech companies) at 20 times earnings (assumes near zero growth at that point). To achieve that AL3 would need to earn $4 M per year, which would probably mean about $20 M in sales. That seems achievable in the next couple of years given that it is in a niche market with few competitors, so I'm happy to hold this stock at this point.
I'd be really interested if you could name the stocks that you believe this company is over-valued compared to.
I think, I may have seen you comment on the DRO thread. Both companies are in the technology area and have ties with the military. This looks much cheaper than DRO which made a profit last year but is certain to have a big loss this year (both are near profitable). If I compare the two they are both trading on a similar multiple of sales, but DRO seems to have hit a road block for growth. It also has much weaker management that have no skin in the game. AL3 looks a lot cheaper than DRO to me.
I am however curious about the stocks that you are referring to. Often there are hidden gems in this part of the market (and even more dogs) and I'd love to hear which companies you rate more highly than AL3.
AL3 Price at posting:
19.0¢ Sentiment: Buy Disclosure: Held
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