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Pulse Seismic Inc T.PSD

Alternate Symbol(s):  PLSDF

Pulse Seismic Inc. is a Canada-based company, which is engaged in the acquisition, marketing and licensing of two-dimensional (2D) and three-dimensional (3D) seismic data to the western Canadian energy sector. The Company owns licensable seismic data library in Canada, consisting of over 65,310 square kilometers of 3D seismic and 829,207 kilometers of 2D seismic. The library covers the Western Canada Sedimentary Basin. Seismic data is used by oil and natural gas exploration and development companies to identify portions of geological formations that have the potential to hold hydrocarbons. Seismic data is utilized by those requiring advanced geophysics to maximize the probability of project success including companies exploring for non-traditional forms of energy such as lithium, companies developing carbon capture, utilization, and storage projects, and companies exploring for helium. It offers its database in various formats, including Seg P1 Format (NAD27) and ESRI Shapefile Format.


TSX:PSD - Post by User

Bullboard Posts
Comment by OptsyEagleon Feb 09, 2013 3:25pm
134 Views
Post# 20963411

RE: OE, EG and B... Consider this...

RE: OE, EG and B... Consider this...

Personally, I don't think it is enough data to confirm that what you say is a trend. 

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I think that the main problem the investing community has with PSD is the fact that their revenues are not consistent and therefore unpredictable.  Their fear is that they may have a random bad year and the stock will sell off.  So when they announce a huge data sale (that's what they were by the way) the stock will rally on the certainty that this provides and that rally will hold for a few months or more.  Soon those same investors will start fearing "comparison anxiety"  where they figure that the quarter, where the big sale was booked, will now provide an impossible comparison for the quarter one year later, to overcome.  Since they believe that the investment community will not like a quarter where revenues are down year over year, they sell.

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I see it a little differently.  Although it would be nice to have more consistent revenues, that is unlikely to happen with this company.  Now if this company were selling a product where there was a hugh fixed cost to providing it, then it most likely would never have survived as long as PSD has, since one bad quarter would have driven it to bankruptcy court.  Pulse however, only requires about $3 Millon per quarter to break even (if I recall).  This $3 million of expenses will be the same whether they sell $7 or $8 million per quarter or they sell $27 or $28 million per quarter.  In either case, the company does fine.  Even if they sold nothing, $12 million borrowed from the bank, would see them into the next year and since their product line is an essential service and a monopoly, that is not going to happen.

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Now what the stock does during these different quarters I cannot control, but in the quarter where they sell $27 million, they have shown that they are willing to take the $24 million of free cash flow and either give it to me in a dividend, make my stock have a larger piece of future profits by buying back other stock or by paying off my debts, by paying down the long term debt on the books.

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I mean, if this were your own private business, that never traded on the stock exchange, would you ever want to sell it at these prices and would you consider it a bad business to be in?  I know I wouldn't.   The only reason you are even contemplating selling it, is due to how other investors have acted in the past.  Why not just hang on to your shares and if there is a sell off, let them take their oodles of cash flow and buy those shares cheaply and burn them.  They won't bother you again.

Bullboard Posts