||EPS - Basic
||Market Cap (m)
|Oil Equipment Services & Distribution
Real-Time news about Velosi (London Stock Exchange): 0 recent articles
Just finished a 10% L&G overhang that has subdued the share price for a year.|
|kimball808: A company whose share price is at or below its net asset value is a strong buy signal for many recovery fund managers and is a big reason why Deryck Noble-Nesbitt, the manager of the Close Special Situations fund, holds Velosi. It is Velosi's strong cash backing - with 75% of its net assets made up of either cash in the bank or liquid working capital - that has attracted the manager's attention to the oil services testing group. Recovery managers will focus on cash as their best guide to intrinsic value and often use discounted cashflow (DCF) models to unearth ideas. DCFs are frequently used in the analysis of utilities, which have dependable future cashflows that can be discounted, using an implied equity-risk premium (ERP) to arrive at a net present value (NPV). They are equally applicable to an incumbent telecom network such as Vodafone.
|kimball808: Digital look does...
The share price of oil rig safety consultant Velosi plunged on Tuesday after disappointing half-year results, and was plumbing the depths again on Wednesday, offering an opportunity to buy the shares at an attractive earnings multiple, FinnCap argues.
"We believe the share price has over-reacted to interim results, which pointed to margin weakness. Indeed, the analysts meeting uncovered that the group is already seeing a pick up in its higher margined specialist services so that gross margins will recover in H2 [the second half]," reports analyst David Buxton.
The broker is leaving its full-year forecasts unchanged. "Our existing forecasts still appear valid, if anything 'slightly light' according to management. This should reassure investors," Buxton asserts.
FinnCap has reiterated its "buy" recommendation and 135p price target.|
|spot1034: Does anyone else feel this fall is overdone?
It might have been understandable if the share price had been racing away, but it hadn't. Even given the rise in the past couple of weeks, it was still modestly priced and now seems even more so, especially when you consider the cash on the balance sheet. Given the consolidation in the sector, could this company shortly find itself on someone's shopping list?|
|bookbroker: You can keep trying to convince yourselves that this co. is a worthwhile investment, but the relative performance of this share price in relation to the cos. operating performance is not only irrelevant but also shockingly bad, no amount of posturing about its prospects will improve the share price, anyone whose been here before should realise this and move on, it's going nowhere unless they can convince outside institutions to invest or they receive an offer for the co.|
|bookbroker: Everyone has been saying these things for years, and yet because of the structure of the major shareholdings, the share price will never reflect the positives with respect to the cos. operating performance, basically an offshore co. with an offshore management and very tight shareholder base, pretty much a holding co. for Malaysian individuals.|
|bookbroker: Very moderate results, can't see anything that will move the price, and cautious statement accompany, disappointing to say the least, now see why share price flagging!|
|bookbroker: I am in the real world, look at the rating, why do you think it is so low, why do not think there is more support from institutional investors, accepting that ok apart from a London listing this co. is effectively run from abroad, however it's appeal for all apart from retail investors is limited. With their growth there should be considerably more interest even for a small co., there is an issue with oil service cos. and the same could apply with Cape Plc. I try to be contrarian in my outlook, but you have to find reasons not to invest in a co. such as this when their metrics are so compelling. I am a holder, have been for a long time, nonetheless it is frustrating when the share price rating does not confirm the outlook. This co. on share price performance has been a dreadful underperformer, but that's the stock market, unless GS. is keeping the lid on it.|
|glasshalfull: Agree Evaluate. I posted as much previously on the thread and didn't feel inclined to do regurgitate.
I've been steadily adding in the low 80's and it looks like that particular tap may have turned off now (sorry Koolio).
You may be interested in David Holding's recent take. Usually provides very sound analysis worthy of research.
16 December 2009
This star performer has taken a breather. Does this offer an opportunity?
When I last wrote about Velosi (LSE: VELO) in April, the shares were languishing with so many others. They stood at 42p and looked like a buy on all parameters. In fact, they'd been even lower just a couple of weeks before then, reaching their nadir of 35.5p in late March.
Since the Spring, the company's shares have benefitted from a combination of the overall market rally and from good news specific to the company. And it's this specific news long-term investors are more interested in than the relatively short term vagaries of the market -- though the latter had presented a nice opportunity.
To put my cards on the table here, I sold the few shares I'd bought in March in September. Funnily enough, this wasn't because I thought the true value had been "outed" in any real way -- despite them more than doubling -- but because I thought there was even better value elsewhere.
Time to get back in?
Today, back at 84p, the shares looking very tempting again. This is mainly due to a combination of balance sheet strength and the prospect of increased earnings. There's a bit of a danger here though. Velosi is an oil services company, and such companies often display value characteristics placing them at a discount to their wider market peers. But that didn't stop the shares going over 150p a couple of years ago.
The company provides quality assurance and quality control services to some of the world's biggest oil and gas companies, including BP (LSE: BP), Royal Dutch Shell (LSE: RDSB), ExxonMobil and Chevron, ensuring that the equipment these companies use works properly and is safe.
Velosi has offices in the USA, the UK, Malaysia and the UAE and has operational or representative offices in a further 27 countries to support its aim of removing the problems faced by oil giants as they try to control operations remotely, in unfamiliar territories. It also researches sub-contractors looking at health and safety and testing equipment.
All good news
Back in early April when I wrote about Velosi, the final results were less than three weeks away and investors were understandably nervous due to the gloomy economic backdrop and relatively low oil price which was putting a dampener on the whole sector. Fortunately for those of us holding shares, the final results for 2008 really were excellent.
They revealed turnover up by 56% to $182.1m, pre-tax profit up by 30% to $14.9m, earnings per share (EPS) of $0.22, cash of $17.8m and almost non-existent gearing of 1%. The company was confident about its prospects for the remainder of the year and was experiencing "unremitting demand" for its services.
Little wonder then, that the share price began its steep ascent. Then the interim results to the end of June this year confirmed the company's progress, showing pre-tax profit up 10% to $7.9m, on revenue of $89.2m, EPS up 8.4% to $0.11 and cash of $20.1m. This performance lifted the shares to a year's high of 118p.
Since then, the shares have taken a breather, perhaps on a little profit-taking, some small cap market malaise and the fact that the company was a little cautious about the outlook, viewing the oil price climb more as a function of decreased supply than increased demand.
Consequently, it views the market as "challenging". From an investment point of view, though, the directors come across as a refreshingly "feet-on-the-ground" bunch. Other companies would be far more bullish -- albeit misplaced.
The company's potential hasn't been lost on the Fool's discussion boards, where Velosi's value was recently explored.
At current exchange rates, the company has cash of £12.3m, and net tangible assets of £37m, yet its market capitalisation is less than £40m. Meanwhile, its broker is expecting EPS of 13.4p this year, rising to 14.4p next year, placing the shares are on a forward price-to-earnings ratio of 5.8.
Strip out the cash, and this falls to less than four against enterprise value. This is plainly too cheap for a growing company experiencing such demand for its services.|
|glasshalfull: Nice to see the Velosi share price gaining some momentum.
I was fortunate with the shareprice of Velti ticking up substantially yesterday.
With the tickers of VEL and VELO doing the biz does anyone have any more tickers beginning with VEL? Could be a new investment stategy for 2010 :-)
Velosi remains undervalued on a PER of 7 with substantial net cash.
Velosi share price data is direct from the London Stock Exchange