Stocks and Investment News

“Simple” Oil Field Services Business Seems a Compelling Value Stock.


Enterprise Group (E, TSX)

40 cents | Market Cap $19 million

Enterprise (E, TSX) is an Oilfields services company with an established uptrend – low risk and about to hit a new multi-year high. Smart immediate buy at current levels.

Enterprise offers specialized equipment rentals and specialized services to the Oil and Gas industry. Its subsidiaries are located throughout Western Canada and operate under the names Hart Oilfield RentalsArctic Therm InternationalWestar Oilfield Rentals, and Evolution Power.

All together Enterprise’s asset base (equipment for rent) is worth more than $40 million.

Increased capital spending across the energy industry is translating into increased business for Enterprise. Q1 was one of their best in many years. Revenues rose 30%, to $7.6 million. Adjusted EBITDA rose 107%, to $3 million.

Enterprise purchased and cancelled 487,500 shares at an average cost of 32 cents. Since beginning their share buyback program they’ve bought and removed 8.7 million shares from the market, which equates to about 17%, so Enterprise is serious about their buyback program! As a shareholder you love to see that – it’s the opposite of dilution.

Management also has been buying and owns about 34% equity.

More drilling and more completion activity leads Enterprise to believe business will remain strong.

Many of their customers are industry leaders like Tourmaline (TOU, TSX), Canadian Natural (CNQ, TSX), and Suncor (SU, TSX).

Not a whole heck of a lot more to say about Enterprise other than to reiterate its well established uptrend and the strong prospect of continued revenue growth. Solid little business here, and profitable. If you’re looking to gain more exposure to the energy industry (especially in Canada) E ain’t a bad way to gain it.


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