Stock Name: Portek
Company Name: PORTEK INTERNATIONAL LIMITED
DMG & Partners Research in a July 8 research report says: "On June 1, International Container Terminal Services, Inc (ICTSI) launched an unsolicited voluntary conditional offer to acquire Portek at $1.20/share, representing a 69% premium to the last traded price.
"While ICTSI's offer appears attractive on a historical basis, we believe it undervalues the stock by as much as 30%. We derive a fair value of $1.56 per share using a sum-of-parts approach, valuing its port business at 14x, in line with its regional peers' average. We observed that recent port deals are sealed at P/E multiples ranging from 20-26x.
"We value the engineering business at 10x P/E. Portek's attractiveness as a takeover target and the potential 27% upside makes the stock compelling at current levels. Effectively, investors are paying a 2-3 cents option for the opportunity to partake in the upside of a higher offer price. BUY"
Company Name: PORTEK INTERNATIONAL LIMITED
| Research House: DMG | Price Call: BUY | Target Price: 1.56 |
DMG & Partners Research in a July 8 research report says: "On June 1, International Container Terminal Services, Inc (ICTSI) launched an unsolicited voluntary conditional offer to acquire Portek at $1.20/share, representing a 69% premium to the last traded price.
"While ICTSI's offer appears attractive on a historical basis, we believe it undervalues the stock by as much as 30%. We derive a fair value of $1.56 per share using a sum-of-parts approach, valuing its port business at 14x, in line with its regional peers' average. We observed that recent port deals are sealed at P/E multiples ranging from 20-26x.
"We value the engineering business at 10x P/E. Portek's attractiveness as a takeover target and the potential 27% upside makes the stock compelling at current levels. Effectively, investors are paying a 2-3 cents option for the opportunity to partake in the upside of a higher offer price. BUY"
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