High Arctic Energy Services Inc (HWO.TO)

They never experienced the low return on capital due to oil pricing. It is due to their location. They are a rare provider to China in that area. He saw no downturn in the return on capital so this is a great company.

The sector has had quite a rebound, and he thinks it is like the canary in the mineshaft. It led on the way down and is now trying to catch up. He would Buy this, but would wait for a bit of a pullback to $3.89.

Ranks fairly well in his process. He looks for companies that have solid, steady, growing earnings. This certainly fits that bill. There are 2 things against the stock price. 1.) Liquidity. A shareholder still owns a significant amount, and has been selling it down, so liquidity has improved a fair bit. 2.) Size. Not a super big company, so it doesn’t fit into a lot of the portfolios of the larger portfolio managers. They have a great operation with their rigs operating under contract in Papua New Guinea. Also, has a great yield that is well-maintained. Wouldn’t be surprised to see them make some acquisitions and start to expand the business.

Likes this a lot. It has been one of those abnormally strong businesses, in an environment where most businesses have been quite challenged. This is part of an LNG play in that it provides services to LNG players that are based in Papua New Guinea. They are currently going through some contract renegotiations and have a pretty concentrated customer base. Wait until the contract negotiations come up.

(Market Call Minute.) Not a fan of service companies. These guys are outside of Canada, but even so not a name he would want to touch.

This is energy services and they are going to get caught up with that. Has a very pristine balance sheet with a net cash position, and this is going to protect them for the downturn. They are going to get through this.

Operates in Canada, but has a big operation in Papua New Guinea. In that environment they are quite well established and are doing well. This stock has quite dramatically outperformed the oil/gas services market over the last 12 months. Sold off really sharply in the last couple of weeks and he expects that somebody, from a portfolio point of view, wants to be out of the stock by the end of the year. The slowdown in energy may eventually hit Papua New Guinea. Has a very small position that he is just going to hang onto. Thinks it goes lower before it goes higher. He is optimistic on energy for next year, particularly in the 2^nd half of the year.

It has been on his Radar screen. It has been a very thin trader so hard to get in and out of. They have operated very well. They pay a nice dividend. And they released good earnings recently. They tend to invest some of their cash in other service companies. They never turn into strategic investments. It is just a market timing and investment standpoint. 5.1% dividend.

A nice gem of a company. Extremely well run. What is holding it back is sentiment and the fact that one of their customers was the subject of a takeover and there was talk of them losing the business if it succeeded. He thinks they will do fine, however.

One of the best companies in the service sector. The reason it is doing so well is that it is hiding in Papua New Guinea with a fantastic drilling operation that is feeding into one of the newest, largest LNG facilities that Exxon (XOM-N) has built. Have a tremendous amount of backlog to work on to fill up that LNG facility for many, many years. He is seeing continual insider buying on this.

He likes this name. They drill especially for Gas. If you are drilling where gas prices are healthy you are okay. There was some concern about a partner a month ago being bought out and that was weighing on the stock. If that clears up then it has room to run.

Has owned this stock in the past and is currently looking at it. It is an energy service company. They have been getting caught in the down draft. They have something that is a little different because they have operation off shore that are related to natural gas. Natural gas is a local market. It may be a buying opportunity here, but he needs to do a bit more research. It is interesting and pays a decent dividend. It is profitable and is showing some decent numbers here.

There is some insider buying. They have a drilling contractor with a full suite of assets. It is a huge LNG project. They will have to keep drilling wells to feed it. It is not that well known.

(A Top Pick May 12/14. Down 24.6%.) When energy started to decline, he had to get out of all energy stocks, particularly energy service companies. They haven’t cut their dividend, and are actually expected to build their EBITDA next year, so he still very much like’s the name. They operate in Papua New Guinea which has extremely complicated work with big expensive rigs that they have to drop in to remote areas. Have a two-year “take or pay” contract, and are expected to grow their EBITDA.

A very interesting company. Just met with them recently and are quite intrigued by them. As a service company, it is probably one that will be rolling (?) in cash flow in 2015. Based in Papua New Guinea. Supplying rigs for drilling, this is needed because of the rough terrain. One of the main things that concerns her is that they are not well diversified. Have some cash in the books right now, so there is an opportunity for them to acquire something or to increase the dividend a little. 5.2% dividend yield.