Q: Hi 5iR Team, I have read a number of your answers to investors questions on PD. 5iR's main concern appears to be PD's high debt. I have read TD's most recent PD report dated April 27/18. In contrast as stated below it is positively a glowing report on PD as if management could walk on water. TD states....
"In our opinion, persistent negativity across the Canadian oilfield services sector
has created one of the best opportunities for investment in quite some time. In this context, we believe that Precision should be a core holding in all
energy portfolios, based on our view of its quality assets, compelling valuation,
potential for FCF generation and deleveraging, experienced management team,
scale advantage, strong U.S. exposure, leading-edge technology initiatives, size,
and liquidity. Specifically, as supply constraints result in near-term pricing traction
and rig upgrades, we expect that Precision's high-quality, homogeneous asset base
will require less capital spending than its peers, implying stronger relative FCF
generation. We are maintaining our ACTION LIST BUY rating and $7.00 target price. In addition, TD does recognize debt as a concern for PD but feels management is committed to better capital discipline.
Ok, 5iR other than high debt do you have other concerns that clearly TD has yet to uncover?
As a cautious investor it always gives me a better feeling when I can get both 5iR and TD analysts recommendations to concur.
Finally SES would probably be TD's second top pick in the drillers. Any thoughts on SES?
Thanks Team. Cheers, Chris
"In our opinion, persistent negativity across the Canadian oilfield services sector
has created one of the best opportunities for investment in quite some time. In this context, we believe that Precision should be a core holding in all
energy portfolios, based on our view of its quality assets, compelling valuation,
potential for FCF generation and deleveraging, experienced management team,
scale advantage, strong U.S. exposure, leading-edge technology initiatives, size,
and liquidity. Specifically, as supply constraints result in near-term pricing traction
and rig upgrades, we expect that Precision's high-quality, homogeneous asset base
will require less capital spending than its peers, implying stronger relative FCF
generation. We are maintaining our ACTION LIST BUY rating and $7.00 target price. In addition, TD does recognize debt as a concern for PD but feels management is committed to better capital discipline.
Ok, 5iR other than high debt do you have other concerns that clearly TD has yet to uncover?
As a cautious investor it always gives me a better feeling when I can get both 5iR and TD analysts recommendations to concur.
Finally SES would probably be TD's second top pick in the drillers. Any thoughts on SES?
Thanks Team. Cheers, Chris
