Cheap energy stocksOnce again this morning, we are seeing most energy services stock continuing
their uptrend.
The kingpin of them all Precision Drilling is up $3.44 or 4.4%
There as to be one or a few big institution getting out and pressuring the SP of Akita.
I wrote to Akita IR to find out who was the major holders of the A share.
Here what i was told
Of the 38,056,407 shares
5,945,285 are held by Aegis
Sentgraf hold 4,543,000 and almost all of the B shares.
Linda southernHeatcott hold 1,661,434
Foyston hold 1,292,200
Timelo inv(JF Tardif fund) hold 747,900
So if these holders are not sellers, the float is about 24,000,000 shares.
At $1.50 these holders witch i am one them with now 76,100 shares, can't be all sellers.
I will say it again, once in stronger hands,Akita will fly.Maybe not today, maybe not
next week but surely sometime in 2024
Once these sellers exausted, Akita will move and move fast.
This was a $26 stocks with the same amount of rigs in 2006.It won't go back to $26
but it will be better valued in a not to distant future
2024 will be a better year for the drilling sector.
Akita will benefit from higher working days.
Akita is trading at ridiculous financials metrics.
This is a micro,micro,micro ignored small cap. Akita trades at less than 3 time traling twelve month EPS. It trade at less than 40% of book. It as a net defered tax asset that is not on their balance sheet worth $1.91. This tax asset loss is shielding the company from paying tax until 2031.
Their rigs value estimation from the company latest presentation(September 2023) stands at $11.71.If you were to substact all debt. you would stiil get to $$9.84
Their rigs in the US are all in the Permian Basin. Here is the link to the latest presentation. PowerPoint Presentation (akita-drilling.com) In their latest quarter reporting,Akita's management said that we will see more activity in Q4 and that 2024 will be a good year.This was corroborated earlier by the
Canadian oil and gas producers.They say drilling will increase by 8% next year.
On a per share basis Total Energy latest acquisition in Austalia for
11 rigs was $4.01.10 of these 11 rigs were working.
Still the gap valuation is immense VS Akita
2023 was a very weak market for drillers, yet Akita was very profitable.
They should be again in 2024 very profitable.
The company is using their excess cash flow to reduce debt.
For the patient investors wiling to do their homework this stock will
more than double.I think this will be a $5 stock if not more within 24 months
