Hudson Hotels: Comfy Returnsby
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.