Opinions
Dennis da Silva
CWC Well Services
CWC-X
HOLD
Nov 05, 2014
Stock price when the opinion was issued
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Has transformed itself from being a service company only. With their acquisition of Iron Hand Drilling they are bringing drilling rigs in. Have a really high sustainable dividend of 7.07 % compared to others at 3%-5%. The EBITDA and cash flow growth could be substantial over the next few years. Around $1 is a great entry point.
Excited by their buying of Ironhand which gives them access to drilling rigs as opposed to service rigs they had. Both companies shared very high utilization rates, which is a key to how oil services companies produce very fine rates of return over a long period of time. Likes it at this level.
Liked this because it was just a regular oil service company. Bought Ironhorse, and they are adding to that fleet. Becoming more of a full service company to prepare themselves, for what he thinks will be a material pickup, in activity for drilling and oil field services in Canada. Yield of 6.5%. Thinks there is tremendous upside.
Talked about this in June. Liked its diversification. It had just acquired a drilling company, so had expanded from just being oil services to being more diversified. Also, had liked the dividend. Just increased the dividend so the odds of a cut in the next quarter or 2 are pretty remote. Just committed to increase their budget to build another rigging bringing them to 9. If they can sustain their activity level, it should do quite well.