FINN ALSO SAID THIS .....
Veltex Corp. (OTC: VLXC) clearly has enormous appreciation potential based on its realistic revenues and net profits projections! It is very rare to discover a company whose stock is so undervalued and yet has everything in place for a dynamic near-term upward move to significantly higher prices. This is a well managed company, with a strong vertical infrastructure in place that expects to generate revenues in excess of $40 million in 2004 with net profits of over $6 million or approximately $0.80+/- net earnings per share (EPS). The Company is currently undergoing its audit for 2003, which is expected to be completed soon. Furthermore, Veltex expects to have its 2004 audit done in the second quarter of 2005. Upon its completion the Company plans on becoming fully reporting with the SEC and moving to a larger exchange. Investor confidence should be significantly enhanced when Veltex becomes fully reporting. Additionally, larger investors and institutional traders will be able to purchase shares of Veltex once the Company is listed on a major exchange and is filing SEC statements.
We strongly believe that VLXC shares could justifiably be trading in excess of $8 per share (potentially much higher) within the coming 12 months. If the stock only carried a Price Earnings Multiple (PE) of 10 X, the shares would be trading in the $8.00 area, based on 2004's net profits forecast of $0.80/share! Our excitement is magnified by our belief that 2005 will continue to show substantial growth in revenues and net earnings. This year, Veltex plans to enter the $6 billion surf apparel industry and hire up to 50 new sales representatives in the first two quarters of 2005. Also, the Company has developed several products that it plans to market to major retailers such as Kohl’s, JC Penney, Sears, Wal-Mart and Kmart.
It would not surprise us if Veltex topped $50 million in total sales in 2005 and/or made some further synergistic acquisitions, which would further greatly expand the Company’s profitability. The shares are currently trading about midway between VLXC’s 52-week low/high price range and, in our opinion, present an exceptional buying opportunity for investors. Keep in mind that the “float” is relatively small at only 2 million shares, so, as the investment community “discovers” this company, demand will undoubtedly accelerate and, consequently, the share price of VLXC could move rather rapidly to much higher levels. That is our expectation.
This is truly a rapidly growing, exciting Special Situation with substantial upside appreciation potential!
Veltex Chairman & CEO Javeed Matin used the knowledge he gained working in trade finance in the United States to open a trading business. In 1996 he became aware of a mill that was going out of business in the Southern United States, purchased the looms, and installed them in an old mill (Velvet Textile Mills) located in Comilla, Bangladesh. He funded the growth of Velvet Textile Mills through a reverse merger into a publicly trading shell in 1999, then returned to Bangladesh to manage the business of Velvet Textile Mills with the goal of building its business to a level that would support the creation of a United States distribution company.
We firmly believe that Veltex Corporation (OTC: VLXC) is severely undervalued at its current price of only $1.25. As a matter of fact, we can not recall ever finding a stock whose price is trading at LESS than two times forecasted Earnings Per Share (EPS). The Company continues to experience record revenues that have increased from $8.7 million in 2001 to projected $40 million+ in 2004. If one applies a very low and conservative PE of 10 X to 2004's projected net earnings of about $0.80 per share, it equates to a share price of $8.00, or about 7 times higher than VLXC’s current depressed price of $1.25. Moreover, the Company’s revenues and net income are expected to continue to accelerate at a record pace in 2005 and beyond. The current market cap is very low at less than $10 million or about one fourth of this year’s projected sales! Veltex has an exceptional management team, excellent profit margins, and is now positioned to become a major player in the multi-billion dollar apparel market. As a matter of fact, its distribution company alone could become a $100 million sales entity over the next few years. We are very enthused about the dynamic growth of Veltex and the incredible appreciation potential that we forecast for VLXC. We predict that this Special Situation will be a highly rewarding GRAND SLAM HOME RUN for loyal long term investors!
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