Trican Well Service Ltd. (TCW.TO)

This is on his coverage list but not yet on his recommended list. Book value is $3.47 compared to its price today of $2.85. The balance sheet is in good shape, their debts are relatively low ($83 million compared to 1.17 billion of equity, which he calls a “non-debt company”). They’re coming to their lows of the year. He likes the company a lot and he expects it to do much better than it did last year. However, if oil drops below $60, Trican will probably be hit a little more. He expects to add it to his action alert buy list in Q2. This company has traded on 2x book value a few times, during bull markets for oil. He thinks it can more than double over the next two years.

He likes the leadership and the balance sheet. They are doing stock buy-backs. Below $3 this is a great buy. They are the biggest fracker in Canada. Book value is $3.47 and it has traded 2.6 times book value. Be patient. He has a $12 target for 3-5 years.

(A Top Pick May 23/17, Down 27%) A pure play in Canadian pressure pumping. Still a big holding for him. Got penalized for concerns to their exposure to dry natural gas. But the market ignored their play in East Duvernay. This has been the poster child to Americans selling or shorting Canadian oil. A major plus: This company is buying back $54 million of stock with their net cash.

A very volatile industry. They are in fracking. A lot of their cost structure is labor. As the labor market becomes tighter it gets into their margins. Very difficult for these companies to get pricing pressure because it is an undifferentiated commodity.

They have a fabulous balance sheet. The debt is offset by their investment in a fracker. $3.40 book value.

(A Top Pick March 23/17 - Down 16.4%.) This is outer stupidity. Talk later about this.

100% Canadian name. Trading at 2.9 times EBITDA. Trading at 20% free cash flow yield. 80% of their business is based off of strong WTI pricing on condensate. Difficult to explain when shares are down 30%. (Analysts’ price target is $6.40)

Last year we formed a base and now we are heading down to it. These businesses can do extremely well if the energy sector picks up. $3.20 would be a place to step in.

He likes this because it has torque, and it is trading at a very cheap multiple. The fracing business in Canada has really been consolidated and is far less competitive than in the US. Trading at a very low valuation of about 3-3.5 times enterprise value to EBITDA. Has a really good balance sheet and will be generating free cash flow this year. This doesn't have any balance sheet concerns. (Analysts' price target is $6.50.)

The services companies are collectively quite cheap by multiple and so is the whole energy E&P sector. Western Canadian Select has not moved as have other oil prices. If you had US exposure that would be better because then you would have un-trapped oil. Pipelines will not fix this for a couple of years.

He likes it. It is a long in three of his funds. It has good valuation. There is one particularly large seller and that has held back the price. He would like to see it stronger, but all of its peers are picking up good momentum. 16 times PE and a really solid balance sheet. It should get a pop when the last of the selling clears up.

(A Top Pick Jan 31/17. Down 16%.) Thinks the frac market, both in Canada and especially in the US, is and will remain undersupplied. There is very good upside in this.

Extra service names are absolutely where the best risk/reward opportunities are. He's specifically focused on the fracers both Canada and the US. This is an area where pricing power remains very strong. Canada's ECO pricing is impacting pricing power, but he sees it sticking. Believes both Canada and the US will be undersupplied for pressure pumping for all of 2018, and likely heading into 2019 despite the concerns of weak natural gas prices. This company gives you almost pure exposure in Canada. You are paying a multiple that is about half its historical average because of this worry of overcapacity in Canada. He doesn't believe in that thesis. Sees about 50% upside in the shares. (Analysts' price target is $6.50.)

Just took over Canyon Energy Services. The company does fracing pressure pumping with fluids to crack the rocks to get the hydrocarbons out. These companies are poised to have a pretty good year in 2018, especially as oil prices are perking up. It looks pretty good going into the new year, but you are vulnerable to a collapse in oil prices with no dividend to back you up.

Over the last 2 years, the chart looks fairly promising in an up channel, but there is a big overhead supply going back over time. The stock is going nowhere, and will probably go sideways from here. There are probably better things to do.