Broca Share Discussion Threads

[the prophet] 07/3/2007 13:19

-yes, another day of strong action, clearly there is decent demand for the shares

[mykai] 07/3/2007 10:56

Moving again on only a few trades

[ltinvestor] 07/3/2007 09:33

The 250,000 trade yesterday was a "buy" and there is further institutional demand.

[the prophet] 07/3/2007 09:21

woody
-thanks for your thoughts
-yes, you have to spot the trend of development and marry that to the share price, no denying that.

-although it is early days for BROC, they do at least have a few contracts (three) plus the letter of intent from Vodafone, so they are out of the starting block.

-we will just have to see how the share price does from here.

[woodcutter] 07/3/2007 08:25

proph

just some further thoughts on my reasons for selling (not intended as advice just thoughts really)

I bought datacash DATA in it's very early days when it was auxinet, i knew that internet payment systems where going to be big, i guess everyone did, so the price was high and i bought in to it.

It took about two years for data to really generate the volume transactions and revenue to justify the original price, needless to say that during this time the price fell considerably, at least i had the fortitude to average down and i had quite a signifcant holding by this stage.

Once it started to generate profits it became a cash cow. I'm out of it now and made quite a profit on it.

I think i made two mistakes. The first, i underestimated the time it took to get the business generating enough transaction volume to profit. The second, i sold too early. FPA looked a better bet so i invested their and lost a little. I guess that's three mistakes!!lol

I don't disagree that it will be big, very big, but at present(as they say on the dragons) "i'm out" and will return when the tide turns.

woody

[the prophet] 06/3/2007 16:36

-well, at the moment the shareholder base is almost entirely composed of 2 ergo shareholders

-to be clear, 2 ergo is no blue sky company, but a strong growth story, making good profits and rapidly growing eps

-2 ergo shareholders have seen how the 2 ergo board have created value, I don't think Broca is going to be any different.

-Broca,with initial contracts and the tech proven, its not really 'blue sky', but, what the hell

-I think this has all the makings of a great opportunity here, imo.

[artful dodger] 06/3/2007 16:26

diificult to measure 'value' in a business like this one
i expect that this will attract the 'blue-sky' brigade or no-one, and they will attach a crazy valuation to this if they like the story.i expect that the spin-off from 2ergo is with this in mind -much easier to sell the story in a nice clean package.

[woodcutter] 06/3/2007 14:57

thx proph

they're on my watch list, just hope i haven't missed a ten bagger lol!

i'll be back in if it drops and i can see value, i'll let you know when!!

woody

[the prophet] 06/3/2007 14:47

-cheers, Woody, no problems, quite understand
-the old saying 'nobody went broke taking a profit' is true
-we will just have to see how it pans out....worth keeping an eye on these , even if you are not holding, imo.

[woodcutter] 06/3/2007 14:41

prophet

i must admit i've sold a decent amount, can't live with the valuation i'm afraid.

I gave it some thought this pm and concluded that these changes in the way banks, credit card cos etc will do business, allowing purchases over phones, will take time to filter through and i can't help feeling that this will be a slower process than is predicted.

I'm certain it will happen but feel that brocs valuation is way off this price and it will fall over the next 12 months while it's getting established then take off once the revenue streams become more visible.

i may be wrong so good luck if you hold for the future.

woody

[woodcutter] 06/3/2007 12:50

i'm overwieght in rgo from early days and don't have much ready cash at present, would like to buy more mwe (very different business) so could be decision time tomorrow on broc.

problem is most of my portfolio is doing well at present despite the market chaos so it's a tough call. What to sell to generate cash for others that i'm interested in?

And i don't consider any of them to be overvalued except this!

I guess the big question is will the others do as well as what i'm holding - anyone got a crystal ball i can borrow??

woody

[the prophet] 06/3/2007 12:42

-woody
-quite understand where you are coming from, good luck whichever way you play it
-just a quick point, margins at Broca are likely to be well in excess of those at RGO (think Broca prospectus talks of high margins)
-personally I don't think Broca will be generating substantial revenues for a while, as they are really on or just off the starting block

-yes, pretty sure directors and the RGO directors are tied in for at least a year.

[panagos] 06/3/2007 12:40

Cheers Proph, i'll have a look at it..

[the prophet] 06/3/2007 12:38

-hi P
-worth checking it out, this could be big potatoes
-if you have followed the 2 ergo (RGO) boys, you will know they haven't put a foot wrong
-RGO reatain 20% of BROC and have invested a couple of mill in them....and they don't do that sort of thing lightly!

-further reading at:

[woodcutter] 06/3/2007 12:37

prophet

I think you're right, but as WB and ben graham have extolled the time to reconsider your investment is when the value and price are out of balance.

I just compared 2ergo profits last year, which as we know is a great company with exceptional growth year on year, (after tax, at 6.6% margin) with broc and it seems to me that the turnover in year 1, to make as i suggested £900K profit, is in the region of over £13m. This is most unlikely.

I still feel we will see it rise and then fall back. I agree with the potential prophet and i will be holding when it starts to deliver but i might have sold and bought back in before that happens.

I'm not a trader and normally hold for the long term but i think there will be a time to sell before returning to get in a a more "sensible price"

I can't recall but are the directors tied in to their holdings for a predefined period??


Incidentally that 200k sale has had no effect on the price

woody

[panagos] 06/3/2007 12:26

Hi TP what's all this broc-coli all about? It looks like a manic share to the sky...lol..spin-off from 2rgo eh?

[the prophet] 06/3/2007 12:05

Woody
-hear what you are saying, but I would suggest that folks buying right now are not buying on the basis of a p/e for this year
-I very much doubt if Broca will make a profit in year one.....not many early stage businesses do!

-the attraction is a massive global market opportunity with some excellent (as far as we can tell) technology
-the shares will be rated on that basis, not year one's p/e, imo.

-I quite understand that type of valuation is not for everyone.

[woodcutter] 06/3/2007 12:00

It looks overpriced to me and someone else thinks so too, having just seen 250k sell go thro'.

At 74p and per of 30 that's approx 2.5p of earnings which at 37m shares equates to over £900K profit........ is this achievable in year 1? i doubt it.

I've no doubt it's a good business and technology but i think it will rise and then fall to something more sustainable (probably it's entry price) over the next few days/weeks. The question is how far will it go before it corrects itself. holding for now but on a strict stop loss.

Woody

[spangle93] 06/3/2007 11:31

I haven't yet been able to find a website address for the spun off company - if there is one, and someone has come across it, could they post it? TIA

[the prophet] 06/3/2007 11:14

-going like a train right now!

[ltinvestor] 06/3/2007 10:06

Having spoken with the inventor last week and after reading this mornings announcement I am confident that this company has the potential to multibag over the next 3 years.

[the prophet] 06/3/2007 09:15

Broca AIM prospectus:



-A spin-off from 2 ergo, Broca offers the mobile phone industry a totally secure way of paying for goods and services.

-Useless fact:
-The name comes from a 19thC French guy, Dr Paul Broca, who discovered the speech area of the brain, now called Broca's area! Know you know!

-If Broca do anything like as well as 2 ergo, shareholders will be in for a treat.




Broca launches SAMS, 11th March 2007