Roger's 1997 Short Picks Message Board

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Strategies & Market Trends : Roger's 1997 Short Picks

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To: CalculatedRisk who wrote (9094)	12/30/1997 7:01:00 AM
From: Pancho Villa	of 9285

CR: thanks for your input on WDRY. I agree with your overall asessment. Operating margins are OK (ignoring debt service), internaly generated cash flows are adequate for debt service but are not adequate to retire debt. This would require issuing equity (what any sane CFO would do to improve leverage rartios) with the associated dilution. As for the green shoe, I wonder how far is the underwriter willing to support this puppy if hell breaks loose. Bottom line no risk of default in the near future, they may continue to play a revenue growth game, but return on investment (adding back depreciation and charges) is as bad as I have seen but this may take time to show up in the stock price. I am likely to wait until next year, if not till March, probably until the end of January. On the other hand upside risk should not be that great. Pancho

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