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Pason Systems Inc. (PSI)
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High Arctic Energy Services Inc. (HWO)
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Cathedral Energy Services Ltd. (CET)
Q: Hi, I would appreciate if you can provide your thoughts/analysis of HWO with long term outlook. Stock has lost significant value since beginning of this year.
Thanks,
Thanks,
5i Research Answer:
HWO reported its Q4 results in late March which caused shares to sell-off ~25% over the next couple of months. In Q4 it disposed of underperforming assets for $38.2M, it reinstated a monthly dividend of $0.005 in April but generated a net loss for 2022. The stock now pays a good yield of 6.1%, but sales have mostly declined year-over-year, with the exception of a slight increase in 2022. It has a good balance sheet and generates a small amount of free cash flow, but it is a small name with higher risks, and the recommencement of drilling activity has been slower than it initially anticipated. While its balance sheet is strong, its outlook is uncertain and at this time we would be comfortable with another name such as CET or PSI.