Precision Drilling (PD.TO)

This is his main holding in this sector. Activity is pretty healthy, and there is no particular reason for it to decline.

You need to be cognizant that demand for rates can ramp up or down very, very quickly with commodity prices. This has had a good run because of the extreme cold weather, which created a big spike in natural gas prices. This is one of the largest land-based drillers, and is well managed. A good long-term hold potentially, but it is such a volatile stock in a cyclical industry that you would never want it to be too much of your equity portfolio.

A good sector to be in and this is one of the leaders in the energy service area. Canadian oil/gas companies have enjoyed tremendous cash flows over the last 6 months or so with the increased commodity prices, particularly on the natural gas side. This company and a lot of drillers are in a good position to take advantage of that.

Has just added a position to her portfolio. She wanted exposure in the drilling space. Even though the stock has done quite well, natural gas storage is quite low so there is going to be a lot of drilling to get storage backup. With LNG projects on the rise, this is positive for drillers. This company is well-positioned for North American exposure, and they are increasing their CapX to buy more equipment for the ramped up demand.

Sees this whole sector becoming more active as more money gets pumped into the oil patch with more and more drilling taking place. Has a good reputation. Solid company. Thinks the stock will continue to show appreciation.

He is looking at the overall theme of LNG drilling in Northeast British Columbia and Northwest Alberta. Looking at the demand for energy generally, this company has great exposure worldwide and is comparatively cheap.

All these drilling stocks are a bigger, more leveraged play on energy markets so they are more volatile. They use expensive equipment so there is more financial exposure than we would like. Prefers Shawcor.

Very interesting chart. Had some problems for several years. Chart shows a slow recovery starting in 2012 and the momentum is increasing, which is very positive. Volume is starting to pick up. The breakout began in February. He would be Buying and using the 50 day moving average of around $12.27 as a Stop. Doesn’t see any strong resistance until you hit around $17-$18.

(Top Pick Sep 12/13, Up 27.49%) Have been delivering on all markets. More upside to come. Increased margin over the last few quarters. Extremely comfortable with this name.

Difficult times for the drilling service area are quickly coming to an end. Drillers are set up for a very good year this year. Ground is starting to get mushy this year. They diversified into the US and that division is quickly catching up. Prefers Canyon.

Reported a pretty good Q4. Outlook looks good. Drilling environment in Canada and the US has been basically flat year-over-year in the 1^st quarter, but activity looks to be picking up, especially if you get some of these LNG facilities green lighted.

One of the largest growing companies in Canada and 3^rd or 4^th largest in North America. Just released results which were very strong. He tries to Buy the drillers when they are trading at BV or a little above and then Sell when they are expensive. As we get out of winter, we’ll see lower drilling in Canada. Sold his holdings and moved into Trinidad Drilling (TDG-T), which also had strong results and is expanding into Mexico and joint ventures in Saudi Arabia.

This follows the natural gas cycle. Drillers move more than the overall oil/gas market. The biggest issue he has is drilling activity. Exporting to the US is way down. There are great pockets of opportunity in liquids rich gas, but in general, he feels the producers are struggling.

EBITDA is around 12X EP so it is in line with its historical multiple. Stock has been hugely volatile and has been a great trading stock. If you own, he would take money off the table. When you look at the CapX program in North America, you are looking at single digit growth. Even for the drillers, and the fracers for that matter, there is still a lack of pricing power. Wait for a correction into the low $9’s before buying.

Service companies are a safer way to play the sector. He is going with the big guy. You had your bottom and now it is in an uptrend.