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.
When I was updating my spreadsheet, I noticed even though this stock has done badly lately, analysts have not lost interest in it. You can see this because of the number of estimates that are available for the next 3 years. They also expect positive EPS starting in 2022.
I am following this stock from Canyon Services Group and their merger arrangement with Trican Well Service Ltd in 2017. Canyon Services Group started dividends in 2011 but they were never well covered because of so many years of earning losses. Dividends were stopped in 2016 by Canyon Services. It would seem that Trican Well Services stopped dividends in 2014. Their first dividend would have been paid in 2005.
Debt Ratios are very good. The company has paid off its long term debt. Also, Intangibles and Goodwill has decreased by 86% and the Intangibles/Market Cap Ratio is very low at 0.06. The Liquidity Ratio for 2020 is 2.02. The Debt Ratio is 7.94. For both these ratios a ratio of 1.50 is a good one, so these ratios are excellent. The Leverage and Debt/Equity Ratios are good and low at just 1.14 and 0.14.
The Total Return per year is shown below for years of 5 to 14 to the end of 2020. 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. |
|---|---|---|---|---|---|
| 2015 | 5 | 0.00% | -6.69% | -6.84% | 0.15% |
| 2010 | 10 | 0.00% | -9.44% | -12.50% | 3.06% |
| 2006 | 14 | 0.28% | -3.85% | 4.13% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are negative and therefore useable. The corresponding 10 year ratios are also negative and useable. The corresponding historical ratios are negative and useable. The current P/E Ratio negative and useable. The P/E Ratio for 2022 and 2024 are 29.33 and 9.43. The one for 2022 is high and suggests a stock price that is relatively expensive. The one for 2023 at 9.43 suggests a stock price that is relatively cheap. This ratio is based on a stock price of $2.64 and EPS estimate for 2023 of $0.28.
I estimate a Graham Price for 2021 of $2.09. I get a Graham Price of $2.09 for 2022. The 10 year low, median, and high median Price/Graham Price Ratios are 0.61, 1.03 and 1.25. The current P/GP Ratio is 1.26 based on a stock price of $2.64. This ratio is above high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive, but just into the expensive range.
I get a 10 year median Price/Book Value per Share Ratio of 1.28. The current P/B Ratio is 1.22 based on a Book Value of $552M, Book Value per Share of $2.16 and a stock price of $2.64. The current ratio is 4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Cash Flow per Share Ratio of 9.72. The current P/CF Ratio is 7.34 based on a stock price of $2.64, Cash Flow per Share estimate for 2021 of $0.38 and Cash Flow of $97.2M. The current ratio is 24% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I cannot do any dividend yield testing as dividends have been suspended.
The 10 year median Price/Sales (Revenue) Ratio is 1.59. The current P/S Ratio is 1.21 based on Revenue estimate for 2021 of $560M, Revenue per Share of $2.19and a stock price of $2.64. The current ratio is 24% 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 cheap to reasonable. The P/S Ratio test says the stock price is cheap. The rest are a mixed bag of results. However, the P/B Ratio test is a good one and it says the stock price is reasonable and below the median.
Is it a good company at a reasonable price? The price seems reasonable. This company services the oil and gas industry and so is risky. They seem to be trying to diversify a bit. This is good. Eventually the oil and gas industry will dry up and it is very hard to say when. If history is any guide, it may take 20 years. These things take longer than you ever image, but when change comes, it usually comes quickly (a tipping point). So, this stock is risky, but it could eventually be a winner. I do not know.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (4) and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $3.38. This implies a total return of 28.03%, all from capital gains based on a current stock price of $2.64.
There is one review on Stock Chase in 2021 (February) and it is a Do No Buy recommendation. Christopher Liew on Motley Fool says that this company made a turnaround this year and so has good growth prospects. The executive summary on Simply Wall Street gives this company 4 stars out of 5 and lists no risks, but two possible rewards. A writer on Simply Wall Street expects this company to break even in one year’s time. A writer on Simply Wall Street says that the stock price is up strongly over the past 12 months.
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. The company offers services related to coiled tubing, pipeline service, cementing, fracturing and reservoir solution. 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 Wednesday, September 15, 2021 around 5 pm. Tomorrow on my other blog I will write about Best Canadian Stocks.... learn more on Tuesday, September 14, 2021 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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