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Velan Inc T.VLN

Alternate Symbol(s):  VLNSF

Velan Inc. is a Canada-based manufacturer of industrial valves. The Company designs, manufactures and markets on a worldwide basis a broad range of industrial valves for use in critical applications. It provides solutions to many sectors including power generation, nuclear, oil and gas, chemicals, LNG and cryogenics, pulp and paper, geothermal processes, shipbuilding, defense, and carbon-neutral technologies. Its product categories include quarter-turn valves; gate, globe, and check valves; cryogenic valves; HF acid valves; steam traps; bellows seal valves, and Velan ABV valves. Its service includes research and development, maintenance manuals (IOMs), spare parts and service center locations. Its quarter-turn valves include Memoryseal ball valves and VTP-2000 high performance three-piece ball valves. The Company's cryogenic valves include cast steel cryogenic valves and API 602 small forged cryogenic valves. The Company has manufacturing plants in approximately nine countries.


TSX:VLN - Post by User

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Post by babybunnyon Oct 07, 2023 11:46am
374 Views
Post# 35674570

Still Plenty of Air under Velan?

Still Plenty of Air under Velan?So let me get this straight.  Velan was trading at ~$5.25 in January before the takeover rumours started to swirl.   That price imbedded not only the value of Velan as a going concern, but also the possibility (however remote) of a takevoer.

Fast forward to today, and from what I can tell the only thing that has changed is that the possibility of a takeover has been eliminated.  So assuming $5.25 was a fair price in January, the fair price today is somewhere south of $5.25.   

Furthermore, the body of shareholders now includes arb players who want to move on.  Momentum is negative, and the mood of the long-term owners will be sour.  Even earnings are unremittingly negative, and the unwelcome whiff of asbestos litigation hangs in the air.

The only price anchor I can see is a skimpy $0.12 annual dividend.  

My expectation is that the share price will drift lower to around $4 in the coming weeks.  This represents about a 25% haircut from the January price, and would bring the dividend yield to just 3%.

I would love to hear a counterargument to what I have laid out - a case for a $8 share price rather than $4.  I am not currently a shareholder, and based on what I have seen thus far, do not expect to be.  But I want to learn a lesson on how to pick up the pieces from such a shellacking. 

Just my opinions of course.            


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