Q: What is your opinion on Precision Drilling for the next few years. Its been on a tear recently
5i Research Answer:
With a strong oil market backdrop, PD can perform well. It has been on a strong uptrend since the oil lows of 2020, however, since the late 1990s, its price has declined by 90%, and over the past five years, it is roughly flat. It trades at a cheap valuation of 7.7X forward earnings, but for a company with slightly better fundamentals and less volatility, we prefer PSI. If an investor is optimistic on the oil market over the next few years, we feel these names can do well.