Canyon Services Group (FRC.TO)

Doesn’t know the company very well, but management has done a great job in terms of growing its earnings. If you are going to own something in the sector, this would be one to own. One of the best management teams in the sector and have a history of growing earnings. Multiples have been fairly low. Expects prices to start increasing in the back half of the year.

(Top Pick May 21/13, Up 41.79%) Fourth largest pressure pumping fleet. There will be a large increase in demand because gas has recovered somewhat.

Has owned it. Continues to like the sector. He went more into the producer sector than the services sector.

They frack oil and gas reservoirs extremely well and in Canada. Squeaky clean balance sheet. Pays a nice dividend. We had a falling off of utilization rates in 2013. They were also dragged down with problems of Trican. They then weaseled into some new work with Progress in Northeast BC. Massive operational efficiencies with this company.

There is indication that the fracing industry in Canada is strengthening. There are 3 companies in Canada that fracture stimulate wells, this one, Trican (TCW-T) and Calfrac (CFW-T). Canyon is a pure play on Canada. Put out an absolutely miserable quarter which shows just how competitive the current landscape is. There were signs that things are improving. He is a little cautious in the near-term. Later on this year and into 2015, this segment of the marketplace is tightening and these names will have pricing power once again. EBITDA margins that are currently down around 11%, may go back to their historical 25%-35%. The name has upside, but you are going to have to wait a little longer than what current consensus is. There could be near-term weakness if the price of gas comes off because of fuel substitution to coal.

Would not expect a big report out of the numbers tonight. But as it more actively picks up in the western Canadian basin, their numbers will trend higher. Wait and see what earnings are as well as guidance.

5.5% dividend, no debt and positioned to benefit from the growth in unconventional gas.

Looking at this one. They will be drilling in Alberta and BC to prove up reserves of natural gas, mainly with a high liquids content, that can be shipped to BC eventually and converted to LNG.

Specialized oil services company. Pull back a little but mid to long term this is a good company to be in because Fracking activity should increase. The LNG rush that should happen in the next 3-5 years should benefit them.

Feels this one is all right. Not a huge fan of the oil/gas sector at large. He is probably more interested in rail cars and safety valves.

(Market Call Minute.) Likes energy services. 2014 should be a good year.

A pure play Canadian fracing company. Very well managed. No debt and high rate of return on capital employed. Have a huge benefit coming from the new LNG plants that he thinks are going to be built on the West Coast. They are also involved with the Duvernay.

He can see decent visibility to large spending increases as we march towards the ability to export gas off the continent. Feels that a lot of the spending is going to happen ahead of these plants being constructed. A better way to play this is through the service names. This is the 4^th largest Canadian fracing company. Pristine balance sheet. Sector leading return on capital employed. They are in a great position to benefit from this. Expecting it will be $14 a year from now.

This one is on her watch list. Dividend is safe. She would like to get it a little lower, at least below $11 and closer to $10. Good management.

Stock has performed rather well over the last couple of months, but pulled back off the recent highs. Great entry point, but you have to be looking a little bit longer-term. Expects a weak 2^nd quarter number when they report in a month or so. You are really looking at 2014 for an enhanced pick up in drilling activity in Canada. Pays a nice dividend of about 5% and has $30 million of cash on the balance sheet and no debt.