Is it a good company at a reasonable price? I still like this company. It now seems to be recovering. The stock price is certainly reasonable. I plan to retain the stock I now have and maybe buy more in the future.
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. I sold this stock in December 2014 to buy Mullen instead. Details of why is in a December 2014 post. I know I would be selling Ensign at a loss, but I also could buy Mullen cheaply.
In June 2020, Ensign was selling at $0.74. It was quite a low, so I bought some. I again bought more in May 2021 at $13.60. If you consider my adventure in this stock from 2012, I have still made a profit of 6.87% per year. If you just consider what I bought f rom 2020, my total return is 180.26% per year.
When I was updating my spreadsheet, I noticed that in the first quarter of 2022, this company has made a profit of $0.04 per share. This is after a number of years of earnings losses. The stock was up 85% in 2021 and is up by 180% so far this year.
If you had invested in this company in December 2011, $1007.50 you would have bought 62 shares at $16.25 per share. In December 2021, after 10 years you would have received $238.70 in dividends. The stock would be worth $104.16. Your total return would have been $342.86.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $16.25 | $1,007.50 | 62 | 10 | $238.70 | $104.16 | $342.86 |
Dividends have been suspended, so I can not talk about dividend yields, dividend increases or Dividend Payout Ratios. This company paid dividends for 25 years before suspending them in 2021.
Debt Ratios are probably fine. The Long Term Debt/Market Cap Ratio for 2021 is 5.34. That means that basically, the long term debt owned is 5 times the Market Value of this stock. The stock price really dropped in 2017. In 2017 this ratio was 0.24. Currently this ratio is 1.84. Debt has gone down a bit, but mostly, the stock price has gone up. The company seems to be recovering, so this may not be a problem.
The Liquidity Ratio is good at 1.56. The Debt Ratio is also good at 1.67. The Leverage and Debt/Equity Ratios are fine at 2.50 and 1.50.
The Total Return per year is shown below for years of 5 to 30 to the end of 2021. 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. |
|---|---|---|---|---|---|
| 2016 | 5 | 0.00% | -23.69% | -29.10% | 5.41% |
| 2011 | 10 | 0.00% | -14.21% | -20.30% | 6.09% |
| 2006 | 15 | 0.00% | -8.67% | -14.75% | 6.08% |
| 2001 | 20 | 0.00% | 1.48% | -6.67% | 8.15% |
| 1996 | 25 | 0.00% | 4.25% | -3.61% | 7.86% |
| 1991 | 30 | 0.00% | 25.39% | 8.01% | 17.39% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are negative and so unusable. The corresponding 10 year ratios are also negative. The corresponding historical ratios are 8.48, 12.18 and 16.24. The current P/E Ratio is negative and unusable. The 2023 P/E Ratio is 14307%. The 2024 P/E Ratio is 4.63 based on a stock price of $4.71 and EPS estimate for 2024 of $0.38. This P/E Ratio is low, implying a cheap price, but the further you go out on estimates the more unreliable they are.
I also have Funds from Operations (FFO). The 5 year Price/FFO Ratios are 0.97, 1.83, and 2.70. The corresponding 10 year ratios are 3.09, 4.51 and 5.49. (Note that the last 5 years of FFO are lower than the 6 to 10 year FFOs.) The current P/FFO Ratio is 3.62 based on the last 12 months FFO of $1.30 and a stock price $4.71. The current ratio is between the low and the median of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $7.91 for 2023, the next year of a positive EPS. The 10 year low, median, and high median Price/Graham Price Ratios are 0.54, 0.78 and 0.97. The P/GP Ratio for 2024 is 0.60 based on a stock price of $4.71. This ratio is between the low and the median of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. However, the further you go out on estimates the more unreliable they are.
I get a 10 year median Price/Book Value per Share Ratio of 0.64. The current P/B Ratio is 0.64 based on as stock price of $4.71, Book Value of $1,189M and Book Value per Share of $7.31. This ratio is the same as the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median. The current P/B Ratio is extremely low.
There is also a Book Value per Share estimate for 2022. That estimate is $6.31. With this estimate, the Book Value is $1,026M. With a stock price of $4.71, the ratio is 0.75. This ratio is 16% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median Price/Cash Flow per Share Ratio of 4.56. The current ratio is 3.93 based on Cash Flow per Share estimate for 2022 of $1.20, Cash Flow of $195M and a stock price of $4.71. The current ratio is 14% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I cannot do any dividend yield test because the dividends have been suspended.
The 10 year median Price/Sales (Revenue) Ratio is 0.96. The current P/S Ratio is 0.54 based on Revenue estimate for 2022 of $1,428M, Revenue per Share of $8.78 and a stock price of $4.71. The current ratio is 44% 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, but is certainly reasonable. The P/S Ratio test is a good one and it says that the stock price is cheap. Both the P/B Ratio tests are good with one at the median and one above, but both reasonable. However, the P/B Ratios are very low. The P/FFO Ratio test is also a good one with the result of reasonable and below the median.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (5) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $5.89. This implies a total return of 25.05%, all from capital gains.
An entry for May 2022 on Stock Chase says this is a top pick. Christopher Liew on Motley Fool says the stock lost big time in 2020 but is trouncing the overall market this year. Christopher Liew on Motley Fool says that Market analysts are bullish because of the company’s premium services. The company reports on Newswire its fourth quarter results. This company reports on Newswire its first quarterly results of 2022.
Simply Wall Street on Yahoo Finance reports on ownership of this stock. Simply Wall Street list two risk to this stock of significant insider selling over the past 3 months; and shareholders have been diluted in the past year. Sell is probably just options. Over the past year, CEO, CFO and Chairman all increased their shares. Outstanding shares increased modestly after a decline in 2020. Simply Wall Street gives the stock 3 stars out of 5.
Ensign Energy Services Inc offers services in drilling and well servicing, oil sands coring, directional drilling, underbalanced and managed pressure drilling, equipment rentals, transportation, wireline services, and production testing services. Most of the company's revenue is derived from the United States and Canada. Ensign's customers include crude oil, natural gas, and geothermal operators. Its web site is here Ensign Energy Services.
The last stock I wrote about was about was Hardwoods Distribution Inc (TSX-HDI, OTC-HDIUF) ... learn more. The next stock I will write about will be Maxar Technologies Ltd (TSX-MAXR, NYSE-MAXR) ... learn more on Thursday, June 10, 2022 around 5 pm. Tomorrow on my other blog I will write about Something to Buy June 2022.... learn more on Thursday, June 9, 2022 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.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
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