<CKH has a PE of only 11. Why is it so cheap??>
It got hurt by the co's late-Sept issurance of $150 m of 7.2% senior notes, as no immed. use of the funds was disclosed. According to Smith Barney, that is unwarented, given mm proven track record.
As of 10/31/97, Smith Barney have a 1-m rating on CKH, with 12m target of $84; Equity Reseach-Americas, buy rating; Furman Slz, recommeded list, target price of $75. They think CKH is undervalued, trading at around 11x estimated 1998 EPS and 7.9x 1998 cash flow per share, compared to its peer supply boat cos like TDW, Hvide and Trico.
Raymond James gave CKH a neutral rating, concerning the co's undisclosed plan for the future use of its $300m cash.
Also, according to Edison Research, CKH could be a potential short squeeze target. The current # of shares short in CKH is 1,310,557 vs previous 1,272,421, a 3% increase.
I think CKH is a buy at current level.
Bill |
