Q: Thoresen has been buying shares of VLE in the public market daily for a month now and own about 13 per cent of total shares now. What is your take on that. Would it be for a buy out. Also can you give an update on the company.
Thanks
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5i Research Answer:
It is rare for an investment company to buy a company outright, but it has happened before at times. But this situation to us seems normal: a very large long term investor adding to a very cheap stock. P/E is 6X right now even after the stock's 106% one-year rise. The balance sheet is strong, though cash flow is negative. Good revenue growth is expected in 2024 but lower prices will likely result in lower earnings. Production was close to 20,000 b/d for the 3Q, and the cash position increased. Insiders own 6% and there has been recent buying from them as well. We think it looks good for a higher risk small cap sector play.