Get Long Boots & Coots International Well Control (WEL) @ $1.95 For Significant Growth In 2008...

I remember trading WEL for .30 back in 2003 when Saddam Hussein was on his way out of power and threatening to torch all his Oil wells. Back then Boots & Coots was a balance sheet disaster...tons of debt, hardly any cash, and paltry revenue mostly coming from their emergency Well Control business. However, things have changed remarkably at the Houston based company over the past few years. With the addition of several new business lines focused on servicing and maintaining onshore and offshore oil and gas rigs, revenue has grown significantly going from $29.5M in 2005, to $97M in 2006, to $105M in 2007. This dramatic growth is not only expected to continue this year but it is expected to ramp up a staggering 40% to $147M! In 2009 analysts are anticipating even further top line growth to $175M! Not bad for a company with a current market cap of $148M. Looking at earnings the story gets even better with EPS expected to more than double from 2007's .11 to .23 per share in 2008. This estimate may even appear to be somewhat conservative as last quarter the company guided for .02 and came it a whopping .08. However, assuming the company will earn the .23 analysts are estimating this year we are looking at a trailing P/E of a mere 8! And with analysts estimating .29 for 2009 the forward P/E shrinks even further to 6! Given the company's 40% revenue and 100% EPS growth projections we believe the market will begin accurately valuing the company very soon especially in light of the market's current focus on large cap Oil services names as well as the dramatic rise in spot Oil prices. We don't think it's far fetched for the market to reward WEL with a decent 20 times forward earnings multiple or $6/share given the company's growth figures. With Boots & Coots' worldwide presence (they do business in North America, South America, Africa, and the Middle East) we believe they are in a prime position to take advantage of the increased interest in maintaining highly valuable onshore and offshore oil and gas rigs. We recommend getting long shares here under $2 ahead of earnings after the close on May 5th as we expect another blowout quarter and expect the market to begin taking notice of Boots & Coots' significant growth trajectory.