Opinion on  Wellman Inc. (WMAN)     Sector: Basic Materials  >  Industry: Chemicals - Plastics & Rubber
Buyout Merger candidate large winfall from patent infringement suit

Wellman is among the largest PET makers worldwide, it has 1 billion in assets and about 500 mil debt which makes it a great buyout or merger target.

My forecast for this stock short term within 30 days the stock will trade over 1 worse case, quite possibly to much higher.
There are 4 major factors

1)The Technicals, the chart is indicating a huge move is coming, as key indicators are crossing and the current downtrend is about to reverse.

2) The company is in talks with investment banks exploring options, with 1 bil in assets i see this as great candidate for possible merger or buyout

3) They are suing Eastman for damages for patent infringement, if they win this case it could send the stock to 3 yr highs.

4) Company is Oversold and undervalues compared to assets, I say worse case because they will do everything they can to keep listings. While they search for merger deals or wait for the buyout offers.

and bonus 5) The risk to reward scenario here is amazing, literally could see double digits gains if a few key things happen, all bad news seems to be factored in as company reduces losses and cleans up the books.


Worth a Look

The company has i believe 2 weeks to get the share price over 1,00 to retain listing on the NYSE.  The company has been hit hard since last Q, the company has taken great strides to better its increase revenue and strengthen its books.  They recently did .04 cent price increase, canceled the last divy to share holders, and are pursuing options with invesment bankers to refinance some debt.  Despite the losses they were able to reduce outstanding debt by 21 mil, bottom line is this stock is undervalued at .40 and feel its about to catch up to its true worth.



http://biz.yahoo.com/bw/071029/20071029006669.html?.v=1
"Wellman, Inc. (NYSE: WLM - News) announced that it will be exploring strategic alternatives for the Company and reported its results for the third quarter 2007. Tom Duff, Wellman’s Chairman and Chief Executive Officer, stated, “Our Board has decided to explore strategic alternatives for Wellman before we begin the task of refinancing our debt in 2008. We have engaged Lazard Frères & Co. LLC, an investment bank with extensive experience in chemical M&A transactions, and hope to expeditiously conclude this process. We are further streamlining our operations and expect to reduce our 2008 costs by $20-$25 million compared to 2007 levels.”

Price increase

 http://www.reuters.com/article/marketsNews/idUKWNAS285120071119?rpc=44

All the bad news is factored in at this point, the stock is grossly undervalued, with a billion + in sales last year, patents to key industry technologies, and  Wellman is among the largest PET makers worldwide. These 3 things are the basis of why i think WLM, will be over 1.00  in 2 weeks. (The stock actually tested 1.00 on wed, then was quickly brought down by a few mms, i feel they are clearing it out and getting inventory, as short interest covers.)  The Market makers want to get the cubards  filled just like a savy investor would buy low sell high,  Well WLM is grossly, undervalued here and the chart is now suggesting a move up.

In the short term next 2 weeks, i expect over 1.00 as i believe the company is in talks with investment bankers exploring options. In the near term possible merger or BUYOUT would send the stock to double digits, this has to much going for it for someone not too grab it up.  The point is i dont think they will blow listing , so safe to assume over 1.00. The company has been dressing the books in my opinion to look better to a potential suitor.  They cut the dividend, raised prices, and reduced debts.


If any of these scenarios play out WLM could find its true value in the double digit range ,all in my opinion but risk reward is very favorable going forward.

Ah news, could be a good thing, not what i expected. It might not be the end of the world, i think it should dip then bounce.

http://finance.yahoo.com/q?s=wlm



An exchange move should not affect to day business, and company is exploring options, so  I plan on seeing a bounce.

Took a chance that they would retain Nyse listing, and i relaly put this stock in social picks when it was trading at .30, but for some reason its got my entry at .45, it could be the day when it jumped to 1.00 briefly, and my pick got averaged in higher

well its still holding up in 20s and maybe some good will come out it later, but since now they dont have to get 1.00 to retain listing im unsure on it , so closing it out and keeping on my watch