Enterprise Group (E.TO)

He’s been picking away at it. Great job of paying down debt to zero. A nimble little oil patch company. Business is picking up. Pretty cheap valuation, so you can accumulate it here. Something will happen, like the oil patch lighting up again. A rise won’t take 2 years, but perhaps in the next 6 months.

An oilfield services smaller player that really got hurt during the downturn. A nice little group of companies based in Western Canada. It is just behaving like most oil/gas stocks, but it is a services company.

This company was having issues, where they had so much business, they were renting a lot of equipment which put pressure on their margins. Raised some money and bought a bunch of new equipment, pretty much at the worst time possible. As a consequence they now have more operational leverage than they had before, and he expects equipment is not being used very well. Doesn’t see any big rush to get back into this name.

Still has a small position in this. This has been a painful holding, largely because it has been associated with the oil/gas sector. Currently trading at about 5X PE and 3.5X 2016 earnings, so it is very, very cheap, but is not sure about the catalyst to get this going in this environment. You can think of this as a service provider to the pipelines. Have 2 divisions. Calgary Tunnelling which provides some of the tunnelling services that are necessary for pipelines, and Arctic Therm, which heats up the pipeline during construction, giving a much better weld. They also do work for utilities.

A supply services company associated with the oil/gas business. Recent quarter was a bit of a disappointment to the street and the stock dropped back. Probably in the penalty box until 1) the wind is at their back from a sector standpoint and 2) they post a quarter that surprises the street, or at least meet its expectations. He prefers Petrowest (PRW-T).

Keep in mind that when you are looking at low-priced stocks, they are a little more subject to being whipped around. Had an uptrend from 2012 and broke down through this earlier this year. Levels of support at around $0.90 have been broken. Not a very good picture.

Very cheaply valued and views this as a nice play on pipeline construction. They have a business called Arctic Therm which he thinks is the jewel of the business. Also, have Calgary Tunnelling. Feels the volatility in the stock is unjustified.

He is very impressed with the team. They are pretty good at integrating businesses. It is an LNG play, but goes beyond it. Recently acquired a directional drilling piping company. Likes their ability to integrate.

This company has done very well. Was very small and consolidated a series of oil service companies. They are geared to both the oil sands and pipeline construction. Stock is still trading very cheaply and earnings could grow very quickly over the next couple of years. The challenge over the last little bit has been that they grew very quickly through acquisition, and management needs to focus more on internal execution. Thinks it is just a transition they are going through right now. Owns warrants on this.

Right in the middle of where everything is happening in the oil patch and also with the Site C dam project in BC. They continue to make acquisitions and he thinks their underlying business will continue to grow and there will be synergies between their businesses. As they continue to make acquisitions, they continue to need to finance them and will go back to the market for equity. That is when he will participate. (See Top Picks.)

Chart shows it had a new uptrend through most of last year and broke down through that and is now consolidating. This is called a descending triangle and you don’t want to see these broken. If a broke to the upside of $1, that would probably be bullish.

Likes it. A play on pipeline construction. Pipeline related tunneling. Another business of theirs competes with BAD-T. Have been a consolidator for the last couple of years and now he is hoping they will deliver. E-T is extremely cheap in terms of next year’s earnings.

(Market Call Minute.) This is small and it will grow and it’s cheap.

(Market Call Minute.) Same sort of scenario as Petrowest (PRW-T). Small Company in the oil/gas contracting engineering space. Stock got beat up because they missed earnings, but thinks in the long term it is fine.

(A Top Pick July 26/13. Up 20.51%.) Oilfield services. Have done a bang up job of acquiring lots of companies. Have been very good at raising money. At this point they have to digest, and prove to investors that all the stuff they’ve put together, they can make it work in a better way. If they can, they’ve got a very bright future. A lot of money is being spent in Alberta right now, and LNG is looking more and more real every day. They have nice little niche businesses that have high margins and are very unique, so demand should be high.