ORIENT EXPRESS (OEH): LOOKS LIKE KOPIN TAN MISSED THE BOAT

(previously posted under Keith McCullough: 06/09/08 10:22 AM EST)


We're fascinated with how some of the Barron's reporters gather their "information." But we have our EYE's on them. Barron's reporter, Kopin Tan, looks to be getting no "pop" from his buy OEH note this weekend. The stock is actually down on the open here. Why?

OEH maintains all the characteristics of a Wall Street darling and, indeed, Barron's Tan is now swimming downstream with the crowd. Anyone fishing for the usual Wall Street bait can find it here.

A beaten down stock, smart and activist involvement, hidden assets, and a very high end product that appeals to the tastes of the wealthy Wall Street crowd.

Haven't we heard these fish stories before? The facts are that almost every lodging stock is down significantly more than OEH. OEH is currently yielding the smallest dividend and free cash flow in the entire sector. Oh yeah, it is also the most levered.

Sure there is some untapped real estate value but at a multiple of almost 14x 2009 EBITDA I think we can safely say that it's in the stock. Besides, reeling in real estate value in this credit environment is not quite like shooting fish in a barrel.

If there is a play in lodging right now it is a global one, but not the kind that OEH offers. The only global growth story is hotel brand penetration and unit growth, not RevPAR growth. Last I checked, OEH didn't have a brand. Let's face it. Global growth is slowing. This is not good for OEH's future RevPAR.