Teal LindeEnsign Resource Service GroupESI.TOTOP PICKMay 15, 2023

It is undervalued and has under-performed where it should be. Although it has rallied 30% BMO sees better opportunities in the oil services business. The next quarter is about paying down the rest of the $600 million debt. If all the debt is paid off then it needs to re-instate the dividend. Paying down the debt should transfer to the value of the stock.

Too much debt.

It had a market cap of $400 million before the pandemic and the market cap is still $400 million. Yet it has paid down 1/2 billion in debt and is still trading at its valuation pre-pandemic. As it continues to pay down debt the market will realize its value. He doesn't have insolvency issues with this stock.

It is in its third year (of three years) of paying back $600 million in debt. It still has $158 million to pay back in the second, third and fourth quarters this year. Oil prices are off but management still thinks they can do it with flexibility in capital spending and a supportive banking syndicate. The CEO and CFO collectively bought $250 000 of stock recently. This could be significant since there has generally not been much insider buying in the last few months since the April sell-off. If the debt is paid off they will have all this free cash flow for other purposes including re-instating the dividend, which would lead to a stock price increase,

A small-cap energy service stock caught in challenging times. Carries a lot of debt.

He continues to hold. While there is little corporate insider buying in other stocks Ensign energy is the exception where the CEO has has made significant purchases recently. However ESI is commodity based.

He likes snakes and ladders but there are no ladders here. There is uncertainty with tariffs but this is oversold with the general market. It claims to have paid down $400 million of debt and is ahead of the plan.

The oil and gas service sector has had a dip because of tariff concerns but has recovered. It continues to be very diversified and has half of its rigs in the U.S. It is expected to pay down another $200 million in debt this year.

Oil/gas dipped on fears of US tariffs, but have recovered. ESI is diversified with half their rigs in the US. It's the third year of their 3-year debt repayment plan.

It has been on an aggressive debt pay-down schedule which should be completed by next December. This would mean transferring value from debt holders to equity holders. It should have additional improvements on the operational front.          Buy 4  Hold 2  Sell 0

Will hold it. ESI is a play on them lowering their $600 million of debt, and they are on target.

It is paying down debt at $200 million per year and is half-way through the process of paying off the total of $600 million. When debt is paid off and it is generating $200 million excess capital it can use this capital for dividends and share buybacks. As they approach this point we should see the stock price increase. It is worth about $450 million today.          Buy 7  Hold 2  Sell 0

From its recent results there is investor concern over whether they can pay down $200 million in debt that they had planned to do this year but management says they can. Total debt is $600 million. With a $500 million market cap, its free cash flow yields 40% and it trades at a decent value today.

It anticipated $200 million in free cash flow and achieved this. It is reflected in the price so he would hold back on new buying.

Still likes it. Has a price-free cash flow ratio of 2. Revenues depend on commodity prices, but the Oil Patch has become much more stable. They continue to pay down debt, so down the road can raise the dividend. Shares are down because sentiment to oil services is negative, and the company carries debt.