Precision Drilling (PD.TO)

LNG Development is a fundamental change in the gas industry in Canada. As long as there are no political hurtles it will be important to Canada – drillers, pressure companies and lodging companies. A lot more space to go. 70% linked to oil but kicker is Nat. Gas. They are having a very good second half of the year. Some pricing power going into 2014. A cash flow growth story. 1.8% dividend and they could increase it over time.

He would like to see a pullback. Has had a great run since April and he feels it is due to pull back.

Have done all the right things. Have managed the CapX very well and have restated the dividend. The last 12 months have been a dismal drilling season for Canadian drillers. If you are going to get any sort of a pickup next year, it will be very good comparisons.

Has been off his list for a while. Now he is following it again. Has been way up there ($38 in ’06). The servicing guys are doing better, but they have big interests south of the border. They do a good job and but had a tough time, so they are a turn-around. It can get better.

Likes the drillers. This is the tallest lightning rod with the largest air price value in the oil service space and is doing very well. We are going through a whole new drilling cycle but with brand-new rigs that we have never seen before in Canada. Very good balance sheet. Have very long contracts. .

We are in the seasonal period for oil services. This chart is really good. Trend line going up, new 52 week high. Support around $9.50. Seasonality runs until the early fall. Decent yield. Rig counts are down over the last couple of years and have not responded to the Nat Gas prices. This could be good.

A cyclical stock, not for the faint of heart. Drilling has come off in the US and Canada but what drilling we have had is in these resource plays that are deeper wells that require a certain type of equipment. As we go out and people start proving up reserves for potential LNG on the West Coast, you have very deep pocket international players to do that and this company has the right equipment and the balance sheet to build the new equipment that is needed and they have the relationships. He could see it 25% higher from here.

(Top Pick Jul 10/12, Up 49.42%) His outlook is still good. Would take money off the table at $11. Happy to hold on to it.

This is coming into the seasonal period when oil stocks tend to do well but it is not the prime season for energy stocks but, nevertheless, they can do well. Chart shows a very positive pattern with an ascending triangle that is taking place. If it breaks through the current level, that is a positive sign and will probably see it up around the $12 range. The major seasonal period for energy is February 25 to May 9.

(A Top Pick June 10/12. Up 16.67%.) Thinks there is going to be a lot more activity in the drilling space over the next few years. This is one of the stronger competitors. Have been renewing a lot of their fleet over the last couple of years. Expects day rates to remain stable or even move up.

Likes the oil field sector in general. Chart shows higher lows. The whole sector is doing this. Expect it will go up with the rest of the group. Be patient.

(Market Call Minute.) Well-run company. It’s just been a little too strong. Wait for a pullback to around $7.50.

A lot of drilling in Canada is Nat Gas based. Temperature has not been low enough to activate gas prices to $4. This is the seasonal time to own this one but for him it is a HOLD at best. Prefers CFW-T

She’s looking at all the oil/gas energy services. With a lot of foreign interests that are coming in, as well as the view that natural gas has bottomed, she thinks utilization rates will pick up. A lot of these energy services are trading at 12 valuation. This is trading at 3.5X cash flow and the range of valuation is roughly between 3 to 8 times in the past so expects the stock to get re-rated. Yield of 2.17%. Looking for 30% gain in 12 months.

Not sure he would want to grab this for the short-term. If you are going to buy it here, you would need to give it a year or 18 months as the drilling cycle can get bounced around by a lot of factors. High quality company.