Stephen Takacsy - BNN - TOP Pick VELAN (VLN TSX)
Velan is a world leader in designing and manufacturing complex industrial valves and is considered the gold standard in nuclear valves which are manufactured by its subsidiary in France. This is a stock we last recommended at $5 in 2022, and earlier this year the company accepted a $13 take-over offer by a U.S. company called FlowServe. The stock was trading near $13 after the deal was announced but recently pulled back to around $10 on worries that the government of France was going to block the sale because of a change of control in the nuclear valve business. We think this fear is overblown as we see no difference between the company being controlled by U.S. shareholders or Canadian shareholders. Meanwhile, Velan and FlowServe have extended the deadline to close the sale. We sold our stock after the announcement at around $12.75 and have since repurchased shares at around $10. We expect the French government to approve the sale this fall and that the sale of Velan will close at the agreed price of $13 for a quick 30 per cent return.