Ensign Energy Services 2

On my other blog I am today writing about buying Preferred Shares continue...

I own this stock of Ensign Energy Services (TSX-ESI, OTC-ESVIF). I bought this stock in June 2012. Stock is a good one and was rather cheap in June of 2012. I had been following this stock for some time.

When I look at insider trading, there is only net selling of $2M which is a fairly small amount of the capitalization of this stock (0.08%). In 2013 the outstanding shares seem to be increased by 189,000 shares. This is also a very small number at 0.12% of the outstanding shares. (Often these numbers are around 0.5%).

There is insider ownership with the CEO owning share worth around $7M, the CFO owning shares worth around $16.2M and the Chairman owning shares worth around $426M. The Chairman owns around 17% of the outstanding shares.

The 5 year low, median and high median Price/Earnings per Share Ratios are 10.98, 16.40 and 21.38. These ratios are higher than the 10 year ratios. The current P/E Ratio is 15.23 based on a stock price of $16.14 and 2014 EPS estimate of $1.06. This stock price test suggests that the stock price is relatively reasonable.

I get a Graham Price of $17.92. The 10 year low, median and high median Price/Graham Price Ratios are 0.83, 1.07 and 1.29. The current P/GP Ratio is 0.90. This stock price test suggests that the stock price is relatively reasonable. On an absolute basis, a P/GP Ratio of 1.00 or lower says that the stock price is good.

The 10 year median Price/Book Value per Share Ratio 1.62. The current P/B Ratio is 1.20, a value some 26% lower. This stock test suggests that the stock price is cheap.

The 5 year median dividend yield is 2.55% and the current one is some 14% higher at 2.91. This stock price test suggests that the stock price is cheap to reasonable. The historical average dividend yield at 2.12% and the historical median dividend yield at 1.47% are much lower than the current dividend yield. Both these tests suggest that the stock price is quite cheap. (However the stock price has been relatively cheaper in the past as the historical high dividend yield is 3.33%.

The analysts' recommendations are Buy and Hold. The consensus recommendation is a Hold. The 12 months stock price consensus is 16.29% with 13.38% from capital gains and 2.91% from dividends.

Raymond James issued an Outperform rating on this stock in early May 2014. The Dividend Blogger talks about this stock being on the Dividend Achievers list. The Calgary Herald talks about this company's plans to accelerate its rig building this year and next as industry optimism ramps up.

This company is apparently being accused of Backdating stock options. The CBC Article is here. This happened before 2006, but it is a serious accusation and something that should worry investors. Unfortunately in the early 2000's a number of companies were accused of this and no doubt some companies did it. The practice of seems to have stopped as companies because aware how upset investors were at the practice.

In my point of view the time to invest in good stocks are when they are cheap. I know people think that this industry will take a while to recover and any investment can wait. My experience has been that waiting is a fool's game. It is hard to catch the right time to invest. If I see a stock I like and it is cheap, I will buy. See my spreadsheet at esi.htm.

This is the second of two parts. The first part was posted on Wednesday, May 21, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

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. 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.

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