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Non-Tech : Hvide Marine HMAR - High Growth, Undervalued -- Ignore unavailable to you. Want to Upgrade?

To: Wallace Rivers who wrote (316)3/22/1998 10:07:00 AM
From: Robert T. Quasius  Read Replies (1) | Respond to of 547
 
HMAR shifted towards debt offerings and away from secondary stock offerings when the stock price fell. I think rising debt levels will put a damper on revenue and earnings growth for the short term, but I don't see major problems developing, etc.

Longer term, I see the Street's overblown concerns about a few supply boats coming on line this summer evaporating. Day rates, which already factor in the new supply boats, should resume their upward spiral, and stock prices for HMAR and TMAR should recover.

At that time, I can foresee HMAR doing a secondary stock offering to raise additional capital, retire debt, etc.



To: Wallace Rivers who wrote (316)3/22/1998 3:10:00 PM
From: michael meyers  Read Replies (1) | Respond to of 547
 
While I'm not happy about the reason HMAR shifted to debt [lower stock prices]; I am happy that they are using debt rather than equity to finance their expansion. In the total scheme of things, debt has a *lower* required return than equity [If not, we would all buy bonds rather than stocks.] Equity is not free money, but in fact dilutes the earnings per share. Debt is good.

Michael


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