Josef Schachter Essential Energy Services Ltd. ESN-T BUY Apr 20, 2022

The only public company that is a coil tubing operator. Book value is $1.16 so it is trading at a discount. They won a recent patent suit. He recommends it and likes the story. His only hesitation is that these companies have to tell their story. These guys are reclusive in this respect.

It is a bit small cap for him. It has good price momentum, good valuation, is cheap on a book value basis, and has a good balance sheet. You can buy it for a cyclical recovery.

He thinks pipeline capacity is increasing, which will be good for energy services companies. ESN is the largest coil tubing operator in Canada. It has $18 million debt versus $160 million of equity. Book value is $1.13, compared to a price of $0.52 on the day of interview, so the price is half of book. In turns of upside, it traded at 1.2x book during 2014, so in the next cycle, this company could trade for $1.20 to 1.30. His one-year target is $1.20.

(A Top Pick Sep 18/17, Down 8%) He has a $1.20 target for it. Because the Canadian drilling industry as not recovered it has not done well. Book value is $1.17. He would stay with it. This is a Canadian LNG leveraged story.

(A top pick September 18/17, down 11%). Is Canada’s largest coil tubing company needed for drilling and fracking. Very good numbers in 2nd quarter. Book value is $1.15. Has a 1 year target of $1.20 and a 3-5 year target of $5.00. These stocks are totally ignored.

It has only $19 million of debt and has a book value of $1.15. He thinks the stock is a buy here. It is one of the country’s largest coiled tubing company. He has a 12 month price target of $1.20. He will like be strongly recommending it during the tax season loss selling period November or December.