Opinions
Benj Gallander
Cathedral Energy Services
CET-T
PAST TOP PICK
Mar 01, 2016
Stock price when the opinion was issued
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He holds this in the President’s portfolio. It sells now for half of what he paid for it, it had a near-death experience but they have recapitalized, gotten rid of their high debt, and he likes the management. It has a great balance sheet in this sector. He thinks it could double or triple from here.
Revenues have gone up 82% last year and they have a new line of credit. The rig count is rising and the payment per day has gone up dramatically. He thinks this could trade back into the double-digits. He doesn’t know where oil prices will go, but it seems reasonably priced. Yield 0%. (Analysts’ price target is $2.38 )
He paid a price higher than this stock’s current level but he thinks it is recovering. He likes current management. They eliminated their debt, but they might be on the verge of taking on some debt now. The company used to pay a dividend and he thinks they might reinstate it. He sees tremendous upside. The rising price of oil is good for Cathedral. A drag on their business is the difficulty in finding new employees and the likely higher cost of their wages.
(A Top Pick March 26/15. Down 82.46%.) A driller and has been an absolute disaster. He has had very few blowouts in the past few years, but this one was absolutely brutal. Eliminated their dividend, revenues have gone way, way down, and they have had to lay off a lot of staff. There is a good chance they will survive, but there is no guarantee. Now has it as a Hold.