Essential Energy Services - ESN . TSX
This is what I thought in June 2019 when I first bought the stock...
This company owns and operates a fleet of oil and gas drilling rigs in western Canada. They were hit hard when the price of oil collapsed in 2015 but were making progress towards a recovery in 2018, posting results that were close to breakeven. However, a combination of renewed weakness in the price of oil and a punishing discount for western Canadian crude because of a lack of pipeline capacity to get the oil out of the province has pushed the stock price down to new lows. While the outlook for the Canadian oil and gas industry is looking fairly bleak at the moment, the pessimism in the sector has meant that at the current stock price of $0.31, the stock is trading at a mere one third of its tangible book value and less than 2 times its previous peak earnings. With a strong balance sheet and operations that are currently close to break even, even in this harsh industry environment, there could be value in this beaten down name. Risk in this investment is high given the uncertain future of the industry but there is substantial turnaround potential if they can survive the storm.
What's changed since I made my first purchase of this stock? Follow the ongoing story in the posts below...
Mentioned / Featured in the Following Blog Posts
Portfolio Review – October 2019 October 23, 2019
Portfolio Update: Bought Essential Energy Services June 20, 2019
Portfolio Update: Giving Up On Canadian Oil And Gas February 4, 2019
Portfolio Review – January 2019 January 2, 2019
Portfolio Review – October 2018 October 13, 2018
Portfolio Review – June 2018 June 1, 2018