RE : STX OSV
Sent out my personal thoughts on this fundamental play on STX OSV recently to my clients on the morning of 13 Feb.
I was very much influenced by the decent discussion of the group and I thought this was one of the few rare opportunities in the market to take advantage of it.
On a personal note, I like this stock very much. Just like ezion, building specialised and high grade vessels. Shall not dwell on its FA too much...
Looking at bid volume alone is not a very strong indicator that there is professional support for me. FYI, it is just that we see 1.24 being supported along the way. I always more interested in the done volume.
I am not vested, but a few of my clients are.
Looking at bid volume alone is not a very strong indicator that there is professional support for me. FYI, it is just that we see 1.24 being supported along the way. I always more interested in the done volume.
I am not vested, but a few of my clients are.
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Good morning,
Below is my personal thoughts on STX OSV.
If you have been following STX OSV, they are recently acuquired by an Italy ship building company which currently holds 50.75% stake in STXOSV.
The STX Group, who sold STX OSV to Fincantieri had cash flow/financial problems and had to sell STX OSV at a very much discounted price. Potentially, Fincantieri might got themself a bargain.
Majority of the analysts has a much greater fair value than $1.22. Average is around $1.70.
The current mandatory offer from the italy company is at $1.22, can be seen as a short term price support for STX OSV.
While mandatory offer is at $1.22, they are people queueing to buy at a 2-3 cents premium higher than the offer prices.
Certainly, I feel that the risk to reward is fairly decent in STX OSV. Risk is probably close to 2-3 cents.
Minority shareholders of STX are unlikely to submit their holdings to the current mandatory offer at $1.22 which mean that I do not forsee a takeover to be done at current offer price.
Likely, STX will continue trading after the offer ends and if the italy company is still interested in taking over the company after that, they probably have to offer a much more attractive prices than the bargained price that they manage to get fromt the STX group.
As quoted from the religare report, "In due course we believe SOH SP will come out and outline the synergies and benefits of its new majority shareholder.There is a lot Fincantieri can bring to the table, in terms of customer relationships and sophisticated vessel development".
This is not a buy/sell call.
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