Universal Travel Group (UTVG) To Present at China Investment Forum in NYC

It has been a wild week for Universal Travel Group. It reached a new 52-week high of $3.60 a share, and has since settled down to around $2.25 a share, which is still 30% higher than it was on April 1, 2007. This appears to be the new bottom as the stock has hovered around this price the past two days with the bid ask spread between $2.23 and $2.30. At the current price it appears this stock can still be had a good price given its current growth and the fact the company is currently valued at 2006 EPS of $.08 per share. This was stated in an earlier post, but it is worth stating again; the company is forecasting earnings per share of $.19 in 2007, which at the current multiple of 28 this stock would be valued at $5.32, which is approximately a 136% increase. The company just completed its Speedy Dragon air cargo acquisition, which if you read the 8-K and financials including proforma financials for 2006 this company would have added an additional $898,674 in net income or approx. $.03 cents per share. Just that additional $.03 cents per share represents the potential for a 37% increase in share price if the company was revalued at the current multiple based on the 2006 EPS of $.08 cents plus the $03 cents from the acquisition.

This brings us to the latest positive news. The company is presenting at the China Investment Forum in NYC on April 24 at 11 a.m. This forum will be attended by portfolio managers and analysts. The company will present their business strategy and outlook, which for those of you that have read the 10-K and performed research on the company already know appears to be very bright. The reason this is important is two fold: (1) - it has the potential to increase the investment communities awareness of the company to the point that it translates into portfolio managers taking large long positions on the company, which undoubtedly would push the stock higher in the near term, and (2) - it should also create positive buzz about the company that will generate interest of main street investors, which if translates into further interested buying will push the stock higher.

This brings us to the risks and decisions that all current and near term future shareholders will face. There will no doubt be profit taking with another run up in the stock, which is hard to pass up, but it only makes sense if you think the stock will climb and then fall again much like this week. This would allow you to either take some cash off the table or invest your gains back into the stock at a lower price and increase your holdings and magnify your long-term gains. However, the risk exist that the stock will not fall back down to very attractive levels between $2.25 and $2.35 a share, and you will have limited your upside if the stock keeps climbing. Long-term this company will be a winner, because they have sound fundamentals and operate in a very high growth market, which has the 2008 Olympics and World Fair on the horizon, which should add significantly to earnings.

The company's presentation at the forum can be viewed over the web. The link below will take you the site broadcasting the webcast:

Listen to Webcast

Investor Village - UTVG Message Board

Official Press Release



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