I do not own this stock of Trican Well Service Ltd (TSX-TCW, OTC-TOLWF). I was following Canyon Services Group Inc. and Trican Well Services Ltd. had a plan of arrangement with Canyon Shareholders. I used to get a newsletter weekly from MPL Communications called Advice Hotline. They wrote up this stock on July 19, 2012 and I was impressed with it so I did a spreadsheet. Their site is now here.
When I was updating my spreadsheet, I noticed that the dividend was suspended in 2016. I wonder if I should still be following stocks without dividends. Analysts do not seem to think there will be any dividends in the short term. However, Analysts have not yet lost interest in this firm. Perhaps I should follow only Trican Well Services as they went public in 1996 and Canyon Services only went public in 2006. However, without a dividend, this seems not worth while at the moment.
The company suspended their dividends in 2016. They have only made a profit one year since 2014 and that was in 2017. They are not expected to make a profit over the next three years. They do have a positive cash flow, but it can vary a lot. Mostly the Free Cash Flow is positive, but it was negative for 2019. However, it is expected to be positive again in this year and over the next two years.
Debt Ratios are all good. The Long Term Debt/Market Cap Ratio for 2019 is low and good at just 0.15. The Liquidity Ratio is high and good at 2.50 for 2019. The Debt Ratio is also high a good at 5.00. The Leverage and Debt/Equity Ratios are low and good at 1.25 and 0.25.
The Total Return per year is shown below for years of 5 to 13 to the end of 2019. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2014 | 5 | 0.00% | -25.41% | -26.43% | 1.02% |
| 2009 | 10 | 0.00% | 9.16% | -1.91% | 11.07% |
| 2006 | 13 | -1.66% | -6.96% | 5.30% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are negative and unusable. The corresponding 10 year ratios are 0.58, 1.92 and 2.26 and so low you wonder about using them. The corresponding historical ratios are again negative and unusable. The current P/E Ratio is negative. This testing cannot be done.
I calculate a Graham Price of $1.51, but because of all the earnings losses, it is only my best guess. The 10 year low, median, and high median Price/Graham Price Ratios are 0.61, 1.03 and 1.31. The current P/GP Ratio is 0.76 based on a stock price of $1.15. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.59. The current P/B Ratio is 0.57 based on a stock price of $1.15, a Book Value of $552M, and a Book Value per share of $2.03. The current ratio is 64% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Cash Flow per Share Ratio of 9.72. The current P/CF Ratio is 2.98 based on 2020 Cash Flow per Share estimate of $0.40, Cash Flow of $108.6M and a stock price of $1.15. The current ratio is 69% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I cannot do dividend yield testing because the dividend has been suspended.
The 10 year median Price/Sales (Revenue) Ratio is 1.72. The current P/S Ratio is 0.93 based on Revenue estimate for 2020 of $337M, Revenue per Share of 1.24 and a stock price of $1.15. The current ratio is 46% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably relatively cheap. The one test not showing this is the P/GP Ratio test and it is hard to know how good my estimate is for the Graham Price. All the other test that I can do is pointing to a relatively cheap stock price.
Is it a good company at a reasonable price? This stock has not paid dividends for a few years. I was tracing this company from their purchase of Canyon Services Group Inc so do not have much history for just this company. This is not a dividend growth company, so I feel I need to replace it with another company that is at least paying dividends.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (1) and Hold (8). The consensus would be a Buy. The 12 month stock price consensus is $1.20. This implies a total return of 4.35% all from capital gains.
Analysts mostly like this stock on Stock Chase. Nelson Smith on Motley Fool says smart money is buying unloved Oil companies. A writer on Simply Wall Street would like to see some improvement in the company’s business before buying this stock. A writer on Simply Wall Street says analysts are reducing their forecasts for this stock.
Trican Well Service Ltd is an equipment services company. It provides products, equipment, services, and technology for use in the drilling, completion, stimulation, and reworking of oil and gas wells primarily through its continuing pressure pumping operations in Canada. Its web site is here Trican Well Service Ltd.
The last stock I wrote about was about was Wajax Corp (TSX-WJX, OTC-WJXFF) ... learn more. The next stock I will write about will be Great-West Lifeco Inc (TSX-GWO, OTC-GWLIF) ... learn more on Monday, September 21, 2020 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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