Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Canadian contract driller Precision Drilling Trust (NYSE: PDS ) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Precision Drilling's business and see what CAPS investors are saying about the stock right now.
Precision Drilling facts
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Headquarters (Founded)
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Calgary, Canada (1951)
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Market Cap
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$3.13 billion
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Industry
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Oil and gas drilling
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Trailing-12-Month Revenue
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$1.45 billion
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Management
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CEO Kevin Neveu (since 2007)
CFO Robert McNally (since 2010)
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Return on Equity (Average, Past 3 Years)
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8.5%
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Cash/Debt
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$260.68 million / $816.54 million
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Competitors
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Helmerich & Payne (NYSE: HP )
Noble (NYSE: NE )
Patterson-UTI Energy (Nasdaq: PTEN )
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 98% of the 1,703 members who have rated Precision Drilling believe the stock will outperform the S&P 500 going forward. These bulls include All-Star DarthMaul09, who is ranked in the top 1% of our community, and kmacattack.
Just last month, DarthMaul09 noted that Wall Street sentiment was finally swinging in Precision Drilling's favor: "Many TV pundits had little good to say about the sector, especially after the BP spill. ... But now things are different, profits are growing and the expectation of more energy use as pundits now believe that a recovery is at hand."
Currently, Precision Drilling even trades at a cheapish EV/EBITDA of 8.3. That represents a slight discount to drilling foes Helmerich & Payne (8.6), Noble (8.8), and Patterson-UTI (8.5).
In a reply pitch from last week, kmacattack elaborated on the bull case:
PDS might well be a perfect POSTER CHILD for a turnaround company. The Gray Wolfe acquisition might have been a good move if it had not been for the fact that the energy market was about to collapse. I would prefer that they continue to pay down debt rather than pay dividends. ... They have also used money that could have been used to pay dividends to upgrade their rig fleet, which commands a much higher lease rate than the older equipment. I think they are on the right track. The percentage of the fleet which is active is at an all time high, with very little "dead wood" equipment sitting idle.
What do you think about Precision Drilling, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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