STEP Energy Services (STEP.TO)

Coming out of Arc Financial (private equity). Clean balance sheet. Trading at 1.9 times next year EBITDA. Historical average in Canada of a pumper is 7. Liquidity vacuum in the stock market is creating this opportunity. (Analysts’ price target is $18.20)

This is Canada with some US exposure, in coiled tubing. They have an operational capability of some of the best margins on pressure pumping, relative to Calfrac (CFW-T) and Trican (TCW-T). The wrinkle is that they're majority-owned by ARC Financial (?). The stock is trading at 3X this year's EBITDA and about 2X next year's EBITDA. That is less than half. He can see them possibly being acquired. (Analysts' price target is $18.)