Trican Well Service Ltd. (TCW.TO)

The momentum may become positive soon. He was previously worried about the massive amount of debt, but they have dramatically improved the balance sheet. You might get a 10-15% appreciation in price over the next 6-12 months.

Sell or buy more? Has fairly strong support level at $2.90. Bad sign that dropped below that and continues to drop. Technicians shouldn’t average down. Significant resistance point at $2.80. Anyone who bought in last 2-3 years, is looking to get out. Everything is saying negative. Wouldn’t touch it. Be very cautious. There’s no indication of a bottom.

(A top pick July 19/17, down 21%) Is a pure play Canadian pressure pumper. Concerns were weak natural gas pricing and lowering of capital expense spending. They have been successful at share buybacks. Are being encouraged not to buy new equipment but continue to buy back stock. Trading at about 25% free cash flow yield.

Trican Well Services (TCW-T) vs. Trinidad Drilling (TDG-T). Trinidad is still going through strategic alternatives. The founder quit suddenly. Trinidad still has a large exposure to the Permian, so this is a detractor. Trican is pure play Canada and should work in its favour. He would take Trican over Trinidad

He likes it. He believes it has a $6 one year target. He is waiting because of concerns on the oil price. They have minimal debt. We are trading below book value. They are buying back a lot of shares. The buyback price suggests the company thinks their stock is cheap. When oil gets below $60 he thinks the stock will get down to $2.80 and it would be a buy then.

Trican Well vs. Birchcliff (BIR-T) Be wary of Trican fracking right now, how much extra do you need. Tough to be a fracker up north, with most of the activity in the 48 states.

He is bullish on natural gas and in the future he will be bullish on oil. Differentials are a problem, as is egress of the commodity. They are buying back stock right now. They have really no debt. He I warming up to the story.

(A Top Pick Nov 15/17, Down 32%) The concern was around the level of dry gas spending. He still thinks there is an opportunity for an upward revision later this year. Everyone seems to forget the uplift from the change in currency. This one has been a target of shorts but it unwound last Friday. You will be the recipient of a lot of free cash flow in forms like share buybacks.

Not a great looking chart. It is in a sideways trend and the highs are lower. He would prefer Calfrac, due to its better up trend. He could see this drop to $2.80 and would not be a buyer until it moved back above $3.50. (Analysts’ price target is $5)

He would favour shifting into a much bigger company than this one. Technically it is in a downtrend and it is not a peak period for the energy sector. He would not buy this one.

It's unlikely he'll buy this in the near future. It's wildly cyclical, so it's a trader's stock, not an investor's one. Profitability can swing a lot. He's a long-term, conservative investor. He can't buy-and-hold this.

The perception of weak natural gas pricing has held this stock back. If they report weak Q1 earnings, it may not be until the fall that they will be able to prove themselves. He thinks there is better opportunity trading E&P companies. In the services sector he has picked other horses.

He really likes this but has not moved it to his Action Alert list yet. Book value is $3.40, which is about where the stock is trading. It has a fabulous balance sheet. They have a little bit of debt, $83 million, but they own a position in Keane Energy which is worth much more than that, so this is effectively a debt-free company. They are the largest fracker in Canada. The stock is up about 20% from its lows of the last month because of the bounce. Wait until the stock drops again; he thinks it will go below $3.

(A Top Pick June 19, 2017. Down 16%). The entire pressure-pumping sector, including Trican, is completely undervalued. This company trades at 3x next year’s EBITDA. Mid-cycle valuations are closer to 4 or 4.5. The company has been spitting out high free cash flow, which has let them do $54 million in buybacks. When Shell makes its positive decision on an LNG terminal, which he expects this year, it will be very positive for Trican. He projects their free cash flow yield next year at 20%. He sold his position even though he likes the stock because he thinks that US pumpers are even more cheap than Trican. He can buy the US peers nearer 2.2 times EBITDA, compared to Trican’s 3x and they generate even better cash flow.

This stock has been a source of frustration for many investors. Recent earnings guidance has disappointed the market. Their margins have been eroded and they hold a lot of debt. He thinks this is getting closer to an entry.