Precision Drilling Corp. - Momentum
23 Mai 2011 - 2:00AM
Zacks
Precision Drilling Corp. (PDS) has been one of the stronger
names in the energy space, trading near its recent 52-week high in
spite of sector volatility. With a Q1 earnings surprise of 15% and
bullish growth projection, this Zacks #1 rank stock is digging deep
for momentum.
Company Description
Precisions Drilling Corp., through its
subsidiaries, provides onshore well drilling and completion
services in North America and internationally. The company was
founded in 1951 and has a market cap of $3.94 billion.
Onshore drilling services has been one of the
strongest names in the energy space over the last few months as
exploration companies jack up their capital spending to take
advantage of rising crude prices. That dynamic lifted Precision to
strong Q1 results in late April that came in ahead of
expectations.
First-Quarter Results
Revenue for the period was up 41% from last year to
$525 million. Earnings also looked good, coming in at 31 cents, 15%
ahead of the Zacks Consensus Estimate, where the company has an
average earnings surprise of 62% over the last three quarters.
The strong results were driven by higher
utilization rates, with operating rigs up to 139 from 106 in the
same quarter last year.
The company is also moving aggressively to satisfy
surging demand, on pace to bring a total of 12 new rigs to the
market in 2011 with 11 headed to Canada and one slated for the
United States.
Financial Profile
Precision will also continue to benefit from its
strong financial profile, with cash and equivalents more than
doubling from last year to $249 million against total debt of $781
million.
Estimates
We saw some pretty solid movement in estimates off
the good quarter, with the current year adding 13% to 86 cents
while the next-year estimate jumped 19% to $1.12, a bullish 31%
growth projection.
Valuation
But in spite of the gains, the valuation picture
still looks solid, with a forward PEG ratio of .55, well below the
benchmark of 1 for value.
12-Month Chart
On the chart, PDS took flight in late September
after breaking a 9-month downtrend. Look for support from the
long-term trend line on any weakness, take a look below.
![](http://www.zacks.com/images/upload_dir/1305912093.jpg)
Michael Vodicka is the Momentum Stock Strategist
for Zacks.com. He is also the Editor in charge of the Zacks
Momentum Trader Service.
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