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Opinions Philippe Capelle
Trinidad Drilling LtdTDG.TOBUYSep 03, 2014
Philippe CapelleStock price when the opinion was issued
As of Jun 29, 2019. Market Open.
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John Zechner
Josef SchachterHe would rather see this company stay independent--its metrics are better than either Precision or Ensign (the two companies bidding for Trinidad). However, he sees the combination of Trinidad with Precision is a good deal. He thinks Ensign might come back with a higher bid, creating a bidding rivalry. His price target is $7. If the company is bought by Precision, he would roll over, to become a shareholder of Precision. Note: Precision’s debt to equity is high, almost 1 to 1. Ensign offers a dividend but also has a much higher debt than Trinidad. Yield 0%. (Analysts’ price target is $2.34)
Josef Schachter
(A Top Pick November 9/17 Up 5%) The stock is benefiting from the Ensign bid at $1.68, but thinks it will need a $2.00 price per share to make sense. He would like to see the company remain independent. They have a strong management team. The company is moving more rigs into the US under term contract agreements. He has a $3.00 per share 12 month target price.
Josef SchachterEnsign Energy has a takeover bid on Trinidad. Ensign is trying to consolidate this business. The current offer is $1.68 which is less than what it is trading at today. He believes they have to come up with a much improved cash offer. Trinidad could consolidate this business on their own. Book value of Trinidad is $ 4.63. Why would you let your company go for less than book value? He doesn’t think the deal will happen. (Analysts’ price target is $ 2.50)
Josef SchachterTrican Well Services (TCW-T) vs. Trinidad Drilling (TDG-T). Trinidad is still going through strategic alternatives. The founder quit suddenly. Trinidad still has a large exposure to the Permian, so this is a detractor. Trican is pure play Canada and should work in its favour. He would take Trican over Trinidad
(A Top Pick Nov. 9/17, Up 6%) He likes the management. You want to own some exposure in the drilling exposure. It is a strong buy.
Josef Schachter(A Top Pick November 6/17 - Down 2%) The company is doing very well. Generating a lot of cash. Still sticking to it. Money leaving the sector in general affected it and has done nothing.
John ZechnerWith the price of oil well above USS 60 per barrel their market is expanding. One of the cheapest drillers. (Analysts’ price target is $2.67)
John Zechner
Announced a great partnership with Slumberger last year, but the issue is that it takes a lot of time to get it ramped up. At the same time, they may have had less focus on North America than other players who have been gaining more market share. The story is fine and they have great assets. Eventually the ball will get rolling and he wouldn’t be worried. A great entry point. Trading below 5X earnings value to EBITDA for next year, which is almost the lowest in the group.