We are all going to very happy....very soon...my long term investment is now within a year from paying off.
and yet, I may never sell as this could also easily become a dividend stock. It was truly the best thing that ever happened for all concerned (stock holders). Totally a genius move on Southern Cross's part on how they incented management!!!!! Everyone...note: everyone, now has a vested interest in the stock price increasing beyond 2 dollars a share. Southern Cross will not accept this stock price not increasing as that is how their return on investment will be calculated. The Menendez "corp" will be allowed to purchase 16 million shares from Southern Cross (more than likely at 2 dollars a share) as an incentive to increase stock price. This also will return to the Menendez "corp" majority ownership. No way will shares ever be diluted from here on out.
Look at it this way, at 2 dollars a share this company's value is $280 mil. This company's revenue by the end of 2013 will be obtaining $400 mil per year (of most significance "and growing in revenue"). This company's earnings by the end of 2013 from restructuring debt with the $220 mil recent cash infusion will be obtaining a earning's rate at minimum of 30 cents a share (of most significance "and growing in earnings"). That's 30 cents a share in earnings for a 2 dollar stock where the company's revenue is growing at a rate beyond 10 percent a year. That's a P/E of 6.6 at 2 dollars a share. Solid and growing water transportation stocks (which there currently are none except ULTR) obtain a P/E of over 20...which says this current stock price will be double 2 dollars a share by end of 2013 and could yet triple by end of 2013 when proving revenue and earnings growth will continue. Its still a "no brainer". Best of breed! Just at a 10 percent revenue growth rate, this company will be a "billion" dollar company within 7 years. All these facts will not be overlooked by investors. ULTR is truly the best stock investment even more so now.....as no stock analyst...who looks into this stock (know that many analysts are looking right now due to Southern Cross chosing this company) will be able to not see everything I just covered here. There will be analyst recomendations coming very soon and they will be highly recommending ULTR. Lots of "congrats" from analysts on the conference call for obtaining Southern Cross's cash infusion. Again, stock price now P/E dependent. Price to earnings ratios which analyst allow a certain stock to be at are mostly dependent upon "FUTURE" revenue growth (ULTR's revenue growth is a gaurantee and easily foreseable) as well as "FUTURE" earnings (ULTR will have earnings per share easily in 2013 and no more losses)
For further understanding....lets see 2 other very similar corporations that are in the same water transportation businesses...not bulkers but OSVs and barges:
Kirby (KEX) corporation has a P/E ratio of 14.8 and that is with a future revenue growth rate predicted for next year of just 2.2 percent.
Hornbeck Offshore (HOS) has a P/E ratio of 28 and that is with a future revenue growth rate predicted for next year of 14 percent.
ULTR has a future revenue growth rate predicted at 20 percent for next year. Not my predictions listed here...these are analyst predictions.
Of 77 water transportation companies only 13 of them have a P/E ratio above their industry's standard (water transportation stocks) and of significance...most of them are in the business of offshore support. Of those 13 only one has a predicted revenue growth rate greater than ULTR's. The stock....Golar LNG Ltd (GLNG)...its P/E ratio is 38.