VAT Sees Its Markets Bottoming, But The Market Is Already Counting On That

When I last wrote about VAT Group (OTCPK:VACNY) (VACN.S), a Swiss manufacturer of highly-engineered mission-critical valves used largely in semiconductor and display panel fabrication equipment, I said that the value proposition was precarious due to the prospects for weakening semi equipment demand. That concern played out, with the shares trading down about 33% relative to the price at that last article, as valve sales have since plunged about 40% since.

I also said that I’d be interested in the shares if they dropped another 20%, and while there still would have been some downside from there to the bottom, the shares have rebounded strongly (more than 40%) since the December lows on renewed enthusiasm of an order recovery starting in the second half of 2019. While I think this rally has gotten a little overheated, a pullback of say 10% or so would once again make this a stock to seriously consider given its leverage to what is likely to be strong long-term end-market growth.

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VAT Sees Its Markets Bottoming, But The Market Is Already Counting On That