Friday, May 31, 2013

Ensign Energy Services 2

I own this stock of Ensign Energy Services (TSX-ESI, OTC-ESVIF). I first bought this stock in June of 2012. I have followed this dividend paying stock for some time and I thought it was cheap last year so I bought some. How have I done? Well the stock so far for me is up some 24%. This is not bad.

When I look at insider trading, I find a bit of insider buying and net insider selling. Insider selling is at $0.5 and net insider selling is at $0.5M. Insiders not only have options, but also Rights Deferred Share Units. There is not many in the company with options. Insiders seem to own a lot of shares.

The CEO has shares worth $6.8M and has options are worth $18M. The CFO has shares worth $15.8M and has options worth $10.7M. An officer has shares worth $419M and has options worth $18M. Another officer has shares worth $12.2M and has options worth $1.8M. A director has shares worth $7.2M and has options worth $0.7M. This is just to give you an idea on insider share ownership and option values.

The 5 year low, median and high median Price/Earnings Ratios are 9.26, 12.18 and 15.22. The current P/E Ratio is 14.69 based on a stock price of $16.45 and 2013 earnings estimate of $1.12. I get a Graham Price of $17.85 and 10 year low, median and high median Price/Graham Price Ratios of 0.83, 1.07 and 1.34. The current P/GP Ratio is 0.92.

I get a 10 year Price/Book Value per Share of 1.69. The current P/B Ratio is 1.30 a value some of only 77% of the 10 year P/B Ratio. The current dividend yield is 2.67% and the 5 year median dividend yield is 2.51 a value some 6.5% lower.

Most of these tests show that the stock price is reasonable. The P/E ratio shows the stock price is a bit on the high side and the P/B and P/GP shows that the stock price is a bit on the low side. The P/B Ratio shows that the stock is cheap. It is also good that the current Dividend yield is higher than the 5 year median dividend yield and that the P/GP Ratio is lower than 1.00.

When I look at analysts' recommendations, I find a few Buys and lots of Hold recommendations. The consensus recommendation would be a Hold. The consensus 12 month stock price is $18.00. This implies a 12.09% total return, with 2.67% from dividends and 9.42% from capital gain.

Analysts seem to vary on what they say on this stock. Some think it is a Hold because it is risky and other that the industry has bottomed-out so now is the time to buy. RBC has just raised its target price from $16 to $19 says Mid East Time site. The site of Real Deal stocks give an interesting view of this company.

I think that a stock price between $16.00 and $17.00 would be a good one for this stock. See my spreadsheet at esi.htm.

This is the second of two parts. The first part was posted on Thursday and is available here.

Ensign Energy Services Inc. is an industry leader in the delivery of oilfield services in Canada, the United States and internationally. They are one of the world's leading land-based drilling and well servicing contractors serving crude oil, natural gas and geothermal operators. Its web site is here Ensign Energy.

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. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

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