RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Good company, not so good stock100% agree,,,wheat must be seperated from the chaffe. Companies like TCW, HWO, ESN, STEP...all which have zero net debt should be trading at a market premium. Overlevered dogs like WRG, TDG, PD, ESI should be taken out to the woodshed.
The sector is in dire need of consolidation in an enviroment of lower activity, only by taking capacity out of the system wil there be a defined upward movement in pricing for services. STEP, which is controlled by Arc Pvt Equity has been public for almost 1 year and yet has not used their premium equity price to execute ANY deals. With AECO pricing in the dumper, no LNG coming to Canada anytime soon, faltering WTI/Brent pricing...it's time companies get bigger in the event of a swoon lower.
Risus76 wrote: I agree that they need to buy another company to grow and increase market share, but I think the entire industry has to have a hard reset on expectations. Most seem to think that they can keep negative margins, deal with a major shortage in skilled personnel forcing very significant upward pressure in wages while struggling with low rates and this new prolonged normal for oil prices. Moreover, a point worth rementioning is that the downturn in oil prices which began in 2015 was in a low interest rate environment. However, interest rates will now be definitely rising and heavily indebted/leveraged companies will have a difficult time staying afloat even if oil is range bound 50-60$ for another 18 months or more. I expect more share dilution in these indebted/barely profitable companies and/or they will perhaps go belly-up or be acquired for a song...This is a death spiral and it is every CEO’s responsibility to try to mitigate risk while doing their best to preserve/Increase shareholder value. Even if this means lowering expectations a little to allow a merger with companies such as HWO with pristine balance sheets. I think that this is what HWO with its cash, great prospects in PNG and healthy balance sheet is hoping for with respect to acquiring other companies.