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41.3¢ valmec limited

Ann: ALTRAD TO ACQUIRE VALMEC LIMITED VIA SCHEME OF ARRANGEMENT, page-19

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Dealsmatey

423 Posts.

62

19/07/21

19:05

Post #: 54611486
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Originally posted by edshann: ↑

Directors and ex-Directors from memory own nearly half the company. They have skin in the game. Remember John Holland, contracts can go bad. This is a small high risk business and we are being offered money in the bank. I have large holdings and will be accepting unless there is a higher bid. Note the market is below the offer price. We might get a higher offer, but the market does not think so. 8 times earnings is fair for a small company in this industry.

From my March post.
Smaller cyclical mining service stocks are often on PE of single digits to mid teens. For example using broker forecasts for 2022 MAH ($474m market cap) has a PE of 8, EHL ($620m mc) PE 10, SXE ($133m mc) PE 7, SRG ($212 mc) PE 11, NWH ($916 mc) PE 13. That is an average PE of 10. There are some mining service companies on higher PE such as MND, LYL and IMD but these are generally larger, or have a long record of profitability.

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So why are we selling for less than the average PE? Takeover offers should be above the average. Valmec is also growing with so many tailwinds. What happened to 300m revenue business in 12-36 months ??

This is a shit deal, on any metric you wish to use.

VMX Price at posting: 40.0¢ Sentiment: Hold Disclosure: Held
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