Boots & Coots (WEL) FY2008 Update

Earlier in the week, Boots & Coots International Well Control, Inc. (NYSE Alternext US: WEL) reported very strong fourth quarter and year end results.

Revenues for 2008 increased 99% to $209.2 million compared to $105.3 million for the prior year. Net income attributable to common stockholders increased 177% to $21.8 million, or $0.28 per diluted share, compared to $7.9 million, or $0.11 per diluted share for 2007.

Management didn’t give guidance for 2009, which is a pity, but understandable in this environment.

On the company’s conference call, Larry Winchester, Boots & Coots’ CEO, said that some wells in the US were temporarily being shut down because the price of oil is too low to operate profitably. Although this will impact the company’s business, it’s noteworthy that only 15% of WEL’s revenues are tied to North American land activities.

And how do you think the company’s stock behaved after announcing these record results? In this market, it may not come as a shock if I told you that before the numbers were announced, the stock was at $1.17 and now it’s at $1.15. Today, Boots & Coots can be bought at a P/E of 4.11, a price/sales ratio of 0.41 and a price/book of only 0.85.

I continue to believe this is one of those undervalued companies on my watch list that will do very well. This is still a buy.

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