Pason Systems Inc. (PSI-T)

A small-cap that supplies information to oil/gas-drillers. Shares tanked when drilling ceased during early Covid, but have rebounded. They hold $200 million cash in the balance sheet, which is how they survived. Drilling levels have returned to 2015 levels. They have endured. Earning are way up and commands strong market share in Canada with some in the U.S.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Strong year expected for PSI. Industry wide higher drilling activity expected. Strong improving margins and free cash flow. Dividend raised by 50%. Unlock Premium - Try 5i Free

A oil and gas service company with a $1.7 billion market cap. Payout ratio of 57%. With oil prices rising they could see cash flow grow by 16% in 2020. He will personally be looking to buy it on Monday. Yield 3.52% (Analysts’ price target is $24.90)

*Short* (Pairs trade with a Long on Trican Well Services (TCW-T)). This one is not a bad business, but the stock is much more expensive and is trading at twice the cash flow multiple that Trican does. There has been quite a bit of insider selling recently. All of a sudden, there is some very strong competitive pressure. Dividend yield of 3.5%. (Analysts’ price target is $21.50.)

(Top Pick Mar 18/16, Up 19%) An energy services company. They maintained the dividend and are seeing some move up in drills being used.

You generally see energy stocks leading a little in anticipation of higher oil prices. Then you see higher oil prices followed by energy services companies. Likes energy services companies, but not sure he would buy at this price. If it pulled back $1-$2, he would be pretty excited. His preferences would be Secure Energy (SES-T) and Canadian Energy Services (CEU-T).

A low risk way of playing oil. They do electronic drill recording, and have 68%-95% market share in the various things they do. Although management says they won’t see a come back in terms of rigs until 2017, this is a safe way to play it. Raised the dividend last year. Have no debt. Dividend yield of 3.92%.

Oil service company specializing in taking information off the drilling operations. They are extraordinarily good and price their services to be compelling. They make remarkable margins. They are expanding internationally. Very cleaver team. Excellent balance sheet and lots of cash. Very conservative in how they pay out the distribution. Excellent third quarter.

Hasn’t owned this for some time and is not his choice in the space. If you want an overall approach to technology and innovations in the oil and natural gas space this is a great one to hold. Has come down in terms of valuations and P/E ratios.

Has broken through its all-time high of $20 a share. Oil services instrumentation company, so they are the link between the people running the rigs and the people monitoring the results. Global leading supplier of oil field services electronic instrumentation equipment. 58% market share in the US. Yield of 2.6% and they have increased the dividend for the past 10 years.