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Opinions Michael Simpson, CFA
Precision DrillingPD.TOCOMMENTFeb 06, 2015
Michael Simpson, CFAOwned
$7.32
Stock price when the opinion was issued
$119.16
As of Jun 19, 2026. Market Open.
oilgas field services
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TOP PICK
At an extremely attractive level. Focused on maximizing free cashflow and de-leveraging. Anticipates it meeting an inflection point of moving from using money to de-lever to using it to reward shareholders, by Q2 of next year.
A non-depleting business, low-maintenance assets. Backdrop of LNG Canada, replenishing inventory, good macro headwinds. His numbers show 34% free cashflow yield next year, 36% the year after. His target is $177. No dividend.
Eric NuttallOwned
oilgas field services
HOLD
Short? Reticent to short. Past year has seen demand for drilling and day rates go up, and this should persist for a while. Good performer. Content to hold.
Michael SprungOwned
oilgas field services
BUY
Service company in energy in Canada. Big player in US and Canada. Looks very attractive as a play on energy pickup. In the drilling business for precious metals, and increasingly base metals like copper.
David BurrowsOwned
oilgas field services
PAST TOP PICK
(A Top Pick Aug 10/20, Down 0.19%) Resurgence in energy industry after pandemic has created bull energy market.
Will continue to hold shares, as believes company will benefit from increase activity in energy market.
Strong company that is well managed.
Good balance sheet.
Mike ArchibaldOwned
oilgas field services
COMMENT
Would purchase TCW than PD. Owns neither. The collapse on oil price will impair spending further than maintenance capital. There is always a bad actor that ruins the pricing power. Would prefer the producers.
Eric NuttallUnknown
oilgas field services
PARTIAL BUY
We are on a different cycle than in the past. The business model has shifted which is now positive for oil macro. Oil production growth is no longer elastic to rising oil prices. They are now taking free cashflow and companies are now buying back stocks. There is an opportunity for a rerate. Owned it post-consolidation. Fair value is in the $40s. Does not think the oil company will run out and drill again.
oilgas field services
PAST TOP PICK
(A Top Pick Feb 12/20, Down 9%) He used to own 5% of the company and made a 40% profit in a few months--but he sold it way too early. Give this lesson, now he'd rather sit on oil names and ride it out, or else he'll miss the upside. Companies like this won't spend as much capex even with the oil price rise. You can do better elsewhere.
oilgas field services
TOP PICK
The biggest land driller in Canada and one of the largest in North America. They still generated free cashflow even during challenging times. At $50 oil, they can generate free cashflow equivalent to their market cap if producers drill to maintain production. Downside is limited since they generated free cash this year still. (Analysts’ price target is $1.22)
Eric NuttallOwned
oilgas field services
TOP PICK
There is a base level of activity to just maintain production. The stock price is already demonstrating a poor drilling season outlook. They could privatize the company in 2.5 years on current cash flow. An outlook for $60 oil will lead to an uptick in drilling activity from here. Yield 0% (Analysts’ price target is $2.89)
Eric NuttallOwned
oilgas field services
In a low oil price environment, drilling companies are sometimes being asked to take large price cuts, anywhere from 15% to 30%. Generally speaking the drilling rigs are usually one of the first service companies to take price cuts. On the optimistic side, this is trading below BV, so if you have a longer-term horizon of 5 years, and you can stomach the volatility over the next 6-9 months, it might not be a bad time. On the other hand, you might need a five-year window. He owns some of their bonds.