Velosi Share Discussion Threads

[varies] 15/12/2009 22:08

Glasshalfull
Many thanks

[glasshalfull] 15/12/2009 15:34

Varies - I'm not aware of any UK listed sub-sea plays. Not to say there aren't any.

I've topped up VELO and NBI as my oil service plays. Also have a small amount invested in KBC.
Each of these companies exhibit strong cashflow (KBC should demonstrate this on release of results) and have performed consistently during the last few years.
Ultimately investment will recover strongly in the oil service sector and I'm happy to accumulate for the longer term at low single PER prices for each of these. Don't expect fireworks short term, unless subject of a bid (which I wouldn't discount for each of these).

All IMHO

Regards,
GHF

[varies] 15/12/2009 14:35

glasshalfull
Like you I have done well out of HMS.
I already have a decent position in VELO but will add to it. Sometimes these shares are very difficult to buy and I believe that the present weakness provides a good opportunity.
VELO's business has very little in common with that of HMS and I would like to re-invest some of my HMS money, assuming the bid proceeds, in another "sub-sea" company. There are a few foreign one but can you think of any UK company one could invest in ?

[glasshalfull] 13/12/2009 17:08

Hi marvelman.

It was a comprehensive document covering entire commodity sector.
I thought it was a case of registering then activating registration via an email link. Can't remember any problems, although I failed to bookmark and simply made a note of SWAT analysis.
Don't think the article made mention of anything I wasn't aware of and assisted by providing a note of competitors.
Always like to weigh up pros and cons and revist my investment rationale.

The whole oil services sector has seen softening over the last month or so. There may well be some weakness but given contract visibility and their geographical spread I believe the company to be well placed to ride out any softening. Also have significant cash balance and strong cashflow which provides comfort.
At the current shareprice and low PER I feel this is priced in, & then some.

Having been a shareholder in HMS which received a bid at 80%+ premium on Friday, I'll be holding tight to these. They could easily receive an opportunistic bid IMHO.


Regards,
GHF

[marvelman] 13/12/2009 15:49

GHF...can't open that link without registering and when I did I was asked to contact their admin in order to activate it then gave up...I assume it was a favourable report from your parting suggestion and I must say my boots are already pretty well filled with these already. The recent decline in share price has been painful but have kept adding to keep within my target cash investment. I am hopeful that the slight reversal on Friday was a turning point but in any case on this p/e and with such a strong balance sheet I am confident to keep the faith. Regards.

[glasshalfull] 13/12/2009 15:28

Ah ha !!!
Previous post was made from from my notes but I have since recovered the link to research document.



Fill yer boots!

Regards,
GHF

EDIT - My fill yer boots was in reference to the 112 page document.
I trust one would conduct due diligence and research before filling one's boots of Velosi :-)

[glasshalfull] 13/12/2009 15:25

Forgot to mention that PSQ Analytics which comprises Argus Research, Independent International Investment Research and Pipal produced a research document dated 25th Nov 2009 on the commodity outlook.

In the comprehensive research document they identified 19 companies, conducting SWAT analysis of these.

Velosi are one of the companies covered.

Synopsis of research: -

Strengths - Long term contracts giving good visibility on future revenue / Diversified Business / Consistent revenue growth (can't argue with any of those)

Weakness - Falling margins (Although margin of 7.9% in 2008 had been reversed to 8.04% in H1 2009)

Opportunities - Growing emphasis on asset integrity and quality control / Expansion opportunities in new geographies (Interims confirm this)

Threats - Hindrance to growth from weak global economy (mitigated somewhat by contract visibility and also ability to focus on growth markets/geographies) / Competition from larger players (yep, competion from global players however it is noted that Velosi has an edge since it is more flexible in its offering. It should also be noted that Velosi has expanded it's global reach so can now deliver on a more equal footing.)


Regards,
GHF

[glasshalfull] 13/12/2009 15:08

I've added a few on the dip. Now have an increased exposure which I'm happy with for the timebeing, and until the company confirm trading position.
But with strong cashflow; large net cash balance, circa. $20m; contract visibility and strong outlook statement after 9 months of current year trading - I believe a PER of 6 too cheap.

Velosi announced the following news on 7th Dec (also on their website)



MeFab gets Dubai Industrial City certification

"The certification was awarded following an inspection carried out by Maqayees in association with Velosi Quality Management International (VQMI) which serves as an independent verification body, using the Dubai Quality Mark (DQM) assessment protocol, a propriety risk-based model developed by Maqayees for integrated quality, health, safety and environmental management systems."

Regards,
GHF

[marvelman] 11/12/2009 14:53

The lack of liquidity on these shares emaphasises any sellers effect.....as does a good sized buyer....this is not about something in the woodwork. What is frustrating is the spread which is a big put off even though you can buy slightly under the offer.

[bookbroker] 11/12/2009 10:27

Adding to my earlier statement, I do not believe that a falling oil price and the situation in Dubai merit these falls.

[bookbroker] 11/12/2009 10:24

There is something known as transparency,and I note an earlier post that Velosi is fairly frugal with its news outflow, however a 10%+ fall in two days suggests they should shed some clarity on the situation particularly with regard to the low volume. Even if they are considering raising capital for an acquisition, they need to inform the market sooner rather than later, it is not good enough regardless of the fact that the management own nearly half the stock.

[goofball25] 10/12/2009 00:40

agreed.. youre not gonna make a quick buck here. Patience needed, a quality but overlooked stock.

[marvelman] 09/12/2009 16:47

BB

I doubt it is anything other than boredome by those with no patience at this midway point in the trading period. I have added on this dip and will continue to have faith in this company who have not put a foot wrong up to now. Their balance sheet at the last interim was the strongest I have seen any any AIM stock for a company that is fully trading. They dont put out statements at every opportunity when they receive an order and we are currently in their stronger half year trading period. This is currently on a p/e of 6 or 7 if not lower and that does not include their cash of circa £12 million. I remaiin in and see it as a solid hold although I am as frustrated but not surprised by this fickle markets lack of patience. Regards

[bookbroker] 09/12/2009 16:33

Apart from a declining oil price, anyone have any thoughts on the movement in this one over the last few days, is this a sign of contract deferrals or a squeeze on their tenders in terms of pricing going forward.

[marvelman] 24/11/2009 20:12

Thanks from me too Koolio. Great to here that they have a happy ship which is so very crucial to a company's success. They have one of, if not the strongest balance sheets I have analysed on AIM which for me as an accountant is the number one must for a heavy investment (which I have).They have a cautious and shrewd management team and am delighted they have not been tempted to throw cash away on interim dividends to keep fickle investors happy...we should applaud them for that. Patience needed here but we can also sleep at night knowing our hard earned is in safe hands.

[glasshalfull] 24/11/2009 17:14

Smashing Koolio.
Appreciate you updating us.

Kind regards,
GHF

[robow] 24/11/2009 17:05

thanks Koolio-quite encouraging

[koolio] 24/11/2009 16:51

I had a chat with a couple of gents from Velosi today. I could not grill them over the future prospects as they were meeting with a colleague. However we did touch on the some areas of business, they were very positive for next year. What is quite encouraging, they weren't at all negative about this year they were simply much happier that they had Nigeria back under control and that would help 2010. They said that their bid/win ratio was very high and they were winning a good percentage of available work.
They were positive about Oman (PDO) and Qatar (QP)didn't say much about UAE work. They did say that they had some projects in India.
Generally they gave me a good feeling in an understated casual & way.
Finally they spoke very highly of the CEO who they both said was a brilliant leader.

Happy to hold onto these.

[melton john] 13/11/2009 18:43

Nice chunky buy of 50700 is encouraging. Managed to buy a few this lunchtime. Very little stock available to buy at that time.

[qs9] 13/11/2009 16:14

Good news brewing do you think>?

[glasshalfull] 13/11/2009 13:54

Good to see these back in demand.

Still offer excellent value IMHO....on a PER of 6 with net cash of $19.7m at interim stage.

Regards,
GHF

[glasshalfull] 03/11/2009 19:49

Thanks Steg. Been adding on the dip.

Looks undervalued to me.

Regards,
GHF

[stegrego] 03/11/2009 18:53

Hoodless



Velosi Limited (VELO, 84p, £39.2m). Velosi, the provider of asset integrity and HSE services to a number of major national and multinational oil and gas companies announced the recommencement of operations in Nigeria. Velosi offers services such as Risk Based Inspection (RBI), Maintenance Hazards & Operability Analysis (HAZOP), Health, Safety & Environmental Impact Assessment (HSEIA) amongst others. Nigeria operations will recommence under a new local manager which means that the territory is expected to make a contribution to group revenues from 2010 onwards. This looks like reasonable news flow from a strategic bias but the agreement is not expected to materially affect the performance of the group as a substantial portion of provisions had already been made in prior year accounts. Velosi's business looks to confer some defensive attractions and is worth noting from a valuation point of view. The company outperformed market estimates at the interim with a 10% rise in pre-tax profits and looks set to record a strong full year. The market is looking for 13.4p for 2009 which suggests a valuation of only 6.3x this year, falling to under 6 next year. BUY