Good morning! Twenty-two minutes late, wrong type of leaves on the line at Aldrington. Regulars will know that I've been circling around a stock called Ubisense (LON:UBI) for some time now - it's an interesting technology company which provides systems that enable customers to track the location of people and things in real time. I don't pretend for one minute to understand the technology, but from what I have seen, it looks interesting, i.e. it has obvious potential & usefulness. More importantly than what I think, it is selling to big name customers, and that's what counts.

The problem with growth companies is that they're usually (especially at the moment in this bull market) too expensive, based on historic numbers, so any purchase is a leap of faith about future performance. Investors often collectively over-pay for growth, just assuming that growth will carry on forever, and ignoring the real world issues such as competitors emerging & chipping away at any competitive advantage that a growth company might have.

Anyway, rightly or wrongly, I decided to push the button & have bought a small quantity of shares in Ubisense (LON:UBI) this morning, on the back of this announcement, which announces an order of E0.7m from a large European automotive manufacturer for a Ubisense Smart Factory System. That order in itself is not material to their results, but what interests me is this part of the announcement:

 

The order, valued at approximately €0.7m, is part of a global framework agreement with the manufacturer that covers more than 100 sites and this represents the fourth installation since production acceptance was granted in July this year.

 

So that sounds like there could be considerably more orders in the pipeline.

These shares have edged up about 5% to 205p this morning, which values the company at about £45m, which is certainly not cheap by any means, as you can see from a generally poor performance over the last few years (other than steadily rising turnover):

So I will quite understand if regulars here come to the conclusion that I've taken leave of my senses, paying up for a speculative £45m market cap which doesn't really make any profit, and doesn't pay a dividend. But we are…

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