Inside Wall Street
HUDSON HOTELS: COMFY RETURNS
Who's Anthony Wilson? He's the chairman and CEO of Hudson Hotels (HUDS). Wilson was named this year's "Top Hotel CEO" by HVS International, a New York-based lodging industry appraisal firm. Last year, the honor went to Michael Rose, chairman of Promus Hotel, a large operator of more than 725 hotels. But why Wilson of the little-known Hudson Hotels? Because Hudson gave investors sterling returns.
The HVS award is given to a hotel executive whose company delivered the best value to investors, based on a formula comparing CEO salary with return on equity and stock-price appreciation. Hudson's stock traded 18 months ago at 2 1/2 and zoomed as high as 10 1/2. (The stock traded then as Microtel Franchise & Development until its name and franchising rights were bought by U.S. Franchise Systems.)
Mike Rosen, president of Oppenheimer Bond Fund for Growth, which bought a 16% stake in Hudson, says it is undervalued based on earnings prospects.
He notes that Hudson this year signed a pact to acquire 12 hotel properties. That will increase revenues by 200% next year, to $35 million, Rosen figures. And that's not including the royalties Hudson expects from U.S. Franchise. Rosen sees Hudson posting earnings of 30 cents to 35 cents a share this year and about 50 cents next year. And when U.S. Franchise builds more Microtel hotels, he expects larger royalties to boost earnings. Hudson earned 28 cents last year.BY GENE G. MARCIAL