Benj Gallander Cathedral Energy Services CET-T PAST TOP PICK Feb 19, 2020

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.

It's on his buy list. They are nominally profitable. They are having trouble getting workers. There are definite red flags but he is happy to hold it. It is a recovery play.

(A Top Pick Nov. 3/17, Down 56%) They looked to have turned around. They are all of a sudden having difficulties again. They sold 6 old rigs and bought 7 new ones. They are having some competition for labour. The company is still on the buy list.