Vale Int Share Discussion Threads

[rainmaker] 17/10/2006 12:08

You're right Valhamos-pretty unusual though. In my experience he normally takes a stake of between 8/10% and does not add further. He obviously likes VIG. Maybe it's VIG's relatively small Market Cap.

regards

[deswalker] 17/10/2006 11:47

PG buys from Pennine Downing VCT

[valhamos] 16/10/2006 20:32

No mention of PG. Wouldn't PG increasing his holding be the most obvious candidate?

[rainmaker] 16/10/2006 14:06

If it is Active Value then expect them to push for measures such as buybacks and special dividends. re 408 I see what you mean like a placing -I don't think that is the case but let's wait and see

regards

[deswalker] 16/10/2006 14:01

Company only authorised to buy back 3,726,117 shares so this transaction is 32,000 shares over.

[rainmaker] 16/10/2006 13:57

Hi EJ-Would expect that tomorrow or Wednesday-have got within 0.33% by adding Baronsmead, Artemis and Guinness together.I think we can sure that either a Competitor has taken a stake or someone like Active Value, Fidelity(probably not) or Guiness Peat(that would be ironic indeed!)

regards

[deswalker] 16/10/2006 13:57

One of the trades is broker to broker so I think it's only half the total actually changing hands. Nonetheless something is clearly happening. Would love it to be a share buyback but doubt it somehow. RNS in due course.

[rainmaker] 16/10/2006 13:52

Not immediately obvious which of the Institutional Holders have sold out-by my calculations 20.17% of shares outstanding have been bought this morning. Should be very good for the price though.If not a Competitor then who Active Value?

regards

[rainmaker] 16/10/2006 13:33

I fear a hostile bid is coming as something like 20% of shares have been bought this morning in two tranches. Unfortunate really as it not in the best interests of shareholders-short term gain but we would all be better off holding for the long term. This is what happens when a Broker's coverage is poor- it adversely affects the share price and leaves the Company vulnerable to a hostile bid

regards

[valhamos] 06/10/2006 09:06

IRAP news was disappointing but merely confirms Alice-in-Wonderland nature of EU and its decision making. Would have thought we are likely to see other countries toy with the idea of introducing their own VAT-similar taxes. I agree expediency was the governing factor in the decision, but I still believe Italy will be the first to leave the euro.

Forecasts stay the same as change to IRAP was not factored in. Now the issue has been resolved (not likely to change again unless EU amend Sixth Directive), I expect the company to concentrate on post-tax profits (the only kind of profits shareholders are interested in) outside of Italy.

Offer 9.95p

[deswalker] 05/10/2006 12:59

Yes. Maybe we'll get a 9.5p offer in the next few days in which case I'll be looking to add.

Still think that cashflow and divis may well be a key component to the overall long term return for this stock. Then hopefully a takeover.

The spread makes the secondary market ridiculous. The bid is almost irrelevant to me. However, I am interested when a low offer puts them back on sale.

[rainmaker] 05/10/2006 12:41

Bit of tree shaking going on!MM have dropped the bid from 9 to 8p but you still can't buy any cheaper as offer remains at 10.50p. Re European Court Of Justice's ruling, Is there any right of appeal?Don't believe so as highest European Court but can anyone confirm this

regards

[rainmaker] 04/10/2006 13:17

As it mentions in the piece, the People ruling must have had one eye on the implications/consequences for the Italian economy of an affirmation of the AJ's decision-so Italy meet the target for a reduction in their budget deficit, a bit of a fudge really. Nevertheless VIG has terrific fundamentals but Des as you so succinctly put it, IRAP was the Cherry on the Cake!!

regards

[rainmaker] 04/10/2006 13:10

Thanks Smarkmmm

regards

[deswalker] 04/10/2006 07:36

Cheers for that smark. I'm not surprised really, Italy would have been thrown into economic crisis. I always thought it a long shot in spite of the Advocate General's opinion. Politics always wins over sense in Europe.

Not a big issue but would have been a nice cherry on the VIG cake. Continuing to grow sales outside Italy is the priority.

Wish they'd start putting this tax above the income tax line though to make it clear that it isn't linked to Profit Before Tax and should actually be viewed as a percentage reduction in Italian turnover.

[rainmaker] 03/10/2006 13:59

Valhamos and DW-Many thanks for posts 394 and 395 which I read with great interest

regards

[rainmaker] 03/10/2006 13:57

Dear All- Have been reading up on IRAP in such esteemed publications as Accountancy Age etc and discovered that no only has the Advocate General ruled this tax is unlawful but generally most cases follow the AG opinion and as a general rule retroactive consideration is given to the affects of European Court Of Justice judgements-retroactive entitlement would cover 48 months after payment of the tax!!!

Italy won't give up without a fight since they collect 12bn Euros a year from this tax and if they can prove that they have acted in good faith and the abolition of said tax would have a severe affect on Government finances then they could gain a temporal limitation ie a stay of execution as I understand it but IRAP days definitely seem to be numbered.Still trying to find out when we can expect a final judgement.Comments?

regards

[deswalker] 02/10/2006 16:59

One of the Motley Fool writers analysing the PLN takeover.



His valuation method agrees with mine above (EBITDA/EV) and he concludes that a fairer price would have been 34p instead of the 29p offered.

VIG ought to be worth 30p using the same rationale but I take Valhamos' point about the need for a couple of years of consistent growth.

[deswalker] 29/9/2006 14:16

I should have added that there are people kicking around on here and TMF who think the PLN takeover price is too cheap based on an adjusted (for goodwill) PE ratio of 10.

DLC is on a similar rating I seem to recall, so at the moment these CADCAM companies are not highly rated on this metric. I don't know why but suspect it is partly due to the dollar exposure that they all have.

Maybe they all should be trading higher (seems logical to me), in which case a better offer for PLN would then have been required, and hence VIG could be viewed as even more lowly rated.

[deswalker] 29/9/2006 13:50

Here's my rough and ready comparison.

PLN does approximately 4 times the EBITDA of VIG. Actually it should be closer to 3.5 times due to timing issues of accounting dates (December vs April) but I've taken some off this for VIG due to the Italian tax which is below this line but should actually be above it.

So all else being equal, VIG should have a quarter of the EV of PLN. At 29p a share this is roughly 28.7 mill + 6.1 mill - 1 mill (cash inflow since April 06) = £33.8 mill.

So VIG should have an EV of 33.8/4 = 8.5 mill. At 31 Dec 06 net cash should be about £1 mill if the cyclicality of last year is repeated, so we get a market cap of about 9.5 mill and an share price of 25.5p.

A rough analysis of PSR's gives the same ballpark figure. Finally, PLN has negative tangible assets (not really an issue for a software co I know) and net debt vs net cash so I'd be tempted to give VIG a small premium for this. So we're up at 27-30p fair value.

Very rough and ready but that's the angle I'm coming from.

[rainmaker] 29/9/2006 13:03

Question-Looked briefly at Planit and noticed that it trades on a very low rating of just 7 times earnings. Why? Is this a Company or Sector specific feature when VIG is trading on a prospective P/E of just 9. What I'm getting at is VIG doomed to trade on a low earnings multiple because something Sector specific? I don't think this the case as although VIG's Clients are in the Manufacturing Industry(Car Manufacturers their products are geared to Customers making significant costs savings through productivity gains.
Engineering Cos trade on very low rating because they have to invest in Plant and Machinery plus tie up money in Raw Materials and Stocks.Comments please


regards

[rainmaker] 28/9/2006 12:42

keep an eye open for some press coverage over next week or so-no guarantees but will definitely speak to some contacts.Italian Tax situation re Advocate General's ruling and switch to IFRS and the effect on earnings not appreciated let alone understood. No guarantees they will run with it but let's see!


regards