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Hornbeck Offshore Services (NYSE: HOS) provides technologically advanced offshore supply vessels, primarily in the U.S. Gulf of Mexico and select international markets. It is also a leading transporter of petroleum products, through a fleet of ocean-going tugs and tank barges in the northeastern U.S., the U.S. Gulf of Mexico and Puerto Rico. The company's fleet of over eighty vessels primarily serves the energy industry. Clients include Anadarko Petroleum (NYSE: APC), Chevron (NYSE: CVX) and ConocoPhillips (NYSE: COP).
Hornbeck pleased investors earlier in the month, when it reported Q3 EPS of $1.09 and revenues of $94.7 million. Analysts
had been expecting 83 cents and $88.9 million. Management also guided FY07 EPS to $3.28-$3.52, versus consensus of $3.17. HOS shares popped on the news and then moved into a bullish "flag" consolidation pattern Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Brokers recommend the issue with three "strong buys," four "buys," one "hold" and two "sells." Analysts see an 18% growth rate, through the next year. The HOS P/E ratio (13.77), PEG ratio (1.37), Price to Book ratio (2.15), Price to Cash Flow ratio (9.72), Sales Growth rate (22.19%), EPS Growth rate (51.39%), Operating Margin (41.98%), Net Profit Margin (28.24%), Return on Assets (8.05%) and Net Income per Employee ($115.71k) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $25.09 and $47.88. A stop-loss of $37.00 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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