Major Drilling Group International Inc (MDI-T)

As commodity prices go up this one should do better. He likes the management and their philosophy. The balance sheet is in good shape. He thinks most of the tax loss selling has been done and it will go up now. He would like to find a good entry point to buy into it.

This is basically the canary in the mineshaft for the mining space. The miners have done really well, so this is the major way to play the recovery and resurgence of interest in the mining sector.

He wishes he had bought into this. Clean, clean balance sheet. Good management. They eliminated the dividend, which was probably a smart move. A leader in the field and thinks it will survive. It has potential to do better than a double from here, but it could get hit in the short term.

The drillers have all had a little bit of problem recently. This one is a little bit more exposed to the mining side, which continues to be very, very challenged. If you want a drilling company, he would prefer CanElson Drilling (CDI-T), which has done a good job. Has exposure to Mexico, North Dakota and Canada. Also, has a dividend yield of about 4%.

(Market call Minute) Prefers equipment space, not the drillers.

In the next 12 months or so, she thinks this might rebound from the current lower level. Valuations are quite cheap. Company has a very attractive balance sheet. However, about 30% of their major drilling business is coming from exploration on the Junior side. Stock has priced in somewhat with lower activities. 2.75% dividend and she doesn’t see any increases coming. (Host comment: Beta is 1.9 id est., 90% more volatile than the TSX.)

(Market Call Minute.) There is a decline in mining activity so why do you need to be there on a higher risk play in the mining sector.

This is a drilling company for mines. You are exposed to activity but not to cost overruns. As long as they are drilling trying to find things they are a beneficiary. Looks pretty interesting at this price.

Basically this is providing a service to the mining industry and the global mining industry is hurting right now. You need an upsurge in the fortune for miners and that is not, as yet, in the cards.