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Gold/Mining/Energy : Derlan (T.DRL) -- Ignore unavailable to you. Want to Upgrade?

To: Stephen O who wrote (225)	5/28/1999 8:09:00 PM
From: Serge Collins	Respond to of 319

Stephen: Thanks for posting that article. A few observations are in order. Today's price decline does not bother me as it was to be expected. Anytime a stock is halted, it attracts daytraders who get on board anything they believe is going to move. Mind you, trading had to be halted because this contract is definitely material in nature. When the stock opened lower this morning, these daytraders all bailed out and drove the price down. Most of them have probably left. Good riddance. Once they are all gone, the market will price Derlan according to its justified inherent value. The press is not very keen on covering this company. In fact, the last big article I saw on Derlan was back in the early 90s, in the now defunct Financial Times. The Street is not a fan of Derlan either, viewing management's strategy over the years as a big failure. Analysts are also quite wary, as management has failed to adequately explain its latest move, away from their old strategy of investing in disparate industrial companies with a view to enhancing value, to the new focus on core competencies. It has to be said that analysts were not big fans of this strategy, and those who followed the company were very critical over the years. If the press, the investment community and the analysts are not on your side, you have big problems. The latest announcement is a very big plus for Derlan. It not only bolsters their claim to being a world-class aerospace company, it makes them a more attractive takeover target. I hope the company is being sincere when they say they are trying to enhance shareholder value by exploring all possibilities.. I personally believe they are, but we shall see. This latest contract with the world's biggest aerospace company has without doubt increased the value of the company significantly. The market is still skeptical, but given time, that will change. The change in perception will be helped along by completing the divestiture program. There are still a number of divisions that remain to be sold, not the least of which is the semiconductor division. As I mentioned in an earlier post, selling the semi division seems to be a sticking point. I understand that Tokyo Electron is not that interested, so selling the this division will be a big weight off their shoulders. Most shareholders will be happy once they have divested themselves of the semiconductor division, as well as K & M Electronics. The company will be a more tempting target once the divestments are complete. We should learn more about this at the upcoming annual meeting.

To: Stephen O who wrote (225)	5/29/1999 4:00:00 PM
From: VisionsOfSugarplums	Read Replies (2) \| Respond to of 319

After the PR on the 27th about the Boeing deal, (which was fairly significant IMO despite the cash flow lag), the stock opened strong, gapping up. Once trading, here are the top sellers: House Positions for DRL from 05/27/99 to 05/27/99 Ex House Bought Av/Sh Sold Av/Sh Net $Net T 64 Octagon 0 0.00 155100 2.72 -155100 421590 T 80 First Marathon 3500 2.70 20500 2.68 -17000 45545 T 74 Griffiths 0 0.00 15000 2.72 -15000 40750 Interesting that the next day the NP has the following article: nationalpost.com In particular from the article: <<But Greg McLeish, an analyst at Octagon Capital Corp., said the positive deal may come too late to save Derlan because there likely won't be any deliveries until 2002. Derlan has been a chronic under-performer, with a total return of negative 47% over the past five years, and Mr. McLeish said investors want a complete sale of the company.>> Since January 1 of this year until May 26, Octagon has traded DRL for a net sale position of 2500 shares. On the day of the positive NR, Octagon sells 155,100 shares (approx. 10 times avg. trading vol.), thereby capping any run that may have occurred. Then their analyst comes out and says its an underperformer, investors want to sell the company. Next day, Octagon is awfully quiet in the market (zero trades). The trading by Octagon was unusual on the day of the press release. When I saw the article in the NP the following day, it looked to me like a takeover could be in the works (why else keep a cap on the stock price), although I was thinking hostile. The article you posted lends credence to the possibility of a takeover/sale. Top sellers the day after the PR were: House Positions for DRL from 05/28/99 to 05/28/99 Ex House Bought Av/Sh Sold Av/Sh Net $Net T 74 Griffiths 5000 2.22 81200 2.42 -76200 185422 T 79 Gundy 6000 2.31 24800 2.47 -18800 47408 T 7 Green Line 34300 2.52 44700 2.37 -10400 19834 Top net sellers for both days (day of the PR and the day after) were Octagon and Griffiths: House Positions for DRL from 05/27/99 to 05/28/99 Ex House Bought Av/Sh Sold Av/Sh Net $Net T 64 Octagon 0 0.00 155100 2.72 -155100 421590 T 74 Griffiths 5000 2.22 96200 2.47 -91200 226172 T 79 Gundy 19500 2.57 48800 2.57 -29300 75459 From DRL's AIF dated April 29/99: <<Based upon reports filed with the Ontario Securities Commission, as of such date, the only person, firm or corporation who beneficially owned, directly or indirectly, or exercised control or direction over more than ten percent of the issued and outstanding Common Shares of the Company was C.A. Delaney Capital Management Ltd., which exercised control or direction over 5,272,075 Common Shares representing approximately 18.28% of the issued and outstanding Common Shares.>> C.A. Delaney manages mutual funds (ex/ on behalf of Spectrum's Canadian funds, although C.A.D. is being terminated by Spectrum). I don't know if Octagon or Griffiths is trading on a funds behalf. The two houses could also have been shorting. I don't think they were just selling holdings - if that were the case, they effectively dampened the price whereas they could have let it run and then sold into stronger momentum. Could, as always, be nothing. Regards, t.