Here's my offer.
19 Feb., 1999
From: Roger Finlen
To: Roger Finlen
Regarding : Hvide Marine - HMAR
Hvide Marine is an American Company, Headquartered at Fort Lauderdale, Florida.
They own and operate 282 vessels in support of foreign and domestic transportation
services. The company has a large presents in the transportation of petrolium and
pertolium products and in providing vessel in support of Gulf of Mexico pertolium and gas
production. Much more information is available at there Website " www.hvide.com".
Here's one that I don't understand. I don't understand why the shares of the Common and
Preferred are sell for such low prices.
HMAR is the common stock , of Hvide Marine and there is a Preferred Share that is
traded on something called "portal" . The Common A class share trade at $4.85, (with a
H/L for the year of 21 1/2 High - 4 1/2 Low ) a 3.6 Price/Earnings Ratio (rear looking)
and the Preferred Shares currently sell for around $16.00 a share (with a H/L for the year
of 50 High - 15 Low ) and carries a yearly payout of $3.25. (20% yearly return on
dividends alone) . The Preferred shares are convertible in Common at the rate of 1.754
common per preferred. ($8.77).
Earnings for the 4 Qtr and for the year 1998 where announced 19 Feb., '99, earnings
were .12 for the 4 th Qtr and 1.35 for the year. This is Hvide's 9 th quarter in a row of
positive earnings . 8 analysts follow this stock, 3 strong buy, 4 hold, and 1 no opinion.
Their consenses for earnings for 1999 is $ .89, with not must recovery of profits until last
quarter of 1999. Credit rating agencies rate Hvide BB ??, a little below investment grade
and a "high" Junk rating.
Crude (Texas Light or Intermediate) is today $12.00 a barrel.
Roger asks, if it takes 2 years for the Asian economies to begin recovery and demand
more oil as the recovery grows, and possibility, South America economies begins to
recover and Petrodollars help them and Crude returns to 16/18 dollars a barrel, (50%
increase and where Crude was 1991 to 1997), and during those 2 years I make 20% on
my money and then the common shares of HMAR increase because Crude goup and
demand for crude increases and dayrates for HMAR support vessels increases. HMAR
common returns to $10 (not $21 high, but maybe) and 1.78 conversion = 17.80, and
Preferred premium is 8/14 dollars, let's say 10, that's 28 dollars for the preferred, I read
that as 20% on my money, while waiting for 75% return on price appreciation. (16 to 28)
I believe the above case is conservative, and can see preferred returning to 46/50 range
and believe HMAR will recover to 21 within these next 2 years.
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