RE:RE:RE:TCW's Stock Is at January HighsI suppose my general comment is that your perspectives on CET are focused on what they have done, not what they are doing. In my opinion, CET is losing market share, has shown to be less profitable and less reliable than PHX and (again, IMO) has worse technology, which is contributing to the lower pricing and loss of share. Yes, they were involved in a record well as you noted, however it was as motor assist to RSS. So Pacesetter ran the well, used SLB's RSS tool as primary drill and steer and used their own MWD kit. Nice feather in the cap for CET and the motor, but someone else had the customer, the well and the larger chunk of the field ticket.
Again, not trying to be critical or insulting, I just feel like there are better names out there for long-term upside in the space. CET strikes me as a bit of a 'rising tide lifts all boats' play on a recovery in the market in general. From a liquidity standpoint as well, I think the low trading volume makes it tough to see as much of a share price run as you could see with other stocks.
Who do I like right now? My general thoughts are that the company has to have a good balance sheet, a reasonable market cap (to maybe attract what little institutions are left for the patch) and some market advantages. In Canada, I like CEU and TCW. In the US, I like HP.
CEU is 50/50 drilling chem and production chem. Production chemicals are pretty stable (absent shut ins) and drilling market is starting to rebound off the bottom but the stock hasn't reflected this. They also compete against the big guys (SLB/HAL) who have really shut down these parts of their business and one of their bigger competitors (Q'Max) went bankrupt. They have $250 mil of debenture debt but doesn't mature until 2024.
TCW is in a crappy business (frac) but have #1 market share in Canada and no debt amidst over-levered competitors and a couple large strategics who don't really want to be here (HAL/SLB-Liberty). Best performing pressure pumper stock over the last year and could actually lead some consolidation if they can find a dance partner.
HP is the number 1 driller in the US. Zero net debt and most technologically advanced rigs on the market. Giving up some market share to competitors who will drop their pants on pricing because they have a lot of debt (NBR and PTEN), but they will do just fine. Plus they pay a dividend which they will raise when market conditions improve. They've paid a dividend for 40 years or something absurd like that and this is the first year ever (I believe) that they've cut it. Good opportunity to own a #1 market share technological leader that will pay a handsome dividend moving forward.