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When all the talk about the energy sector is about bad news and dire futures, it is easy to get lost in it at the expense of those companies that are bucking the trend. Let’s take a look at a few oil services stocks in order to think about this. While this sector has certainly been suffering in recent times, there are bright spots. Consolidation in the energy services industry has been kicked up with Precision Drilling’s (TSX:PD)(NYSE:PDS) $1 billion acquisition (including $477 million of net debt) of Trinidad Drilling (TSX:TDG) in an all-share transaction. And now there is a competing offer by Ensign Energy Services . I have to say, a company that is attempting to buy at this time of low valuations is a company I like. Energy services stocks are trading below book value and at tiny multiples compared to their peak earnings capability. And although oil prices in Canada have been severely hit in recent times, natural gas pricing is strong in the U.S., and it’s now strengthening in Canada too, so we have reason to believe that peak earnings will happen sooner rather than later. So, while we don’t know what the outcome of […]
