Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: LTInvestorJim Big red star, 1000 posts Ticker Guide Global Fool SC1 Blue Captain Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 130  
Subject: Re: PDS - a sell? Date: 4/25/2013 3:55 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Anurag --

He, he. I wasn't trying to convince you one way or another. But your question prompted me to look into this smaller position of mine for the first time in a while, and I think I convinced myself!

Nathan --

I think the capex is related to the purchase of all these new Tier 1 rigs, as they decommission older ones. I would think the investment rate will subside a bit over time. Meanwhile, I believe that if you could break out the expected ROIC for the new rigs, it would significantly exceed PDS's historical ROIC (otherwise, why would management do it?) and so, over time will help, not hurt, this metric.

Everyone --

Did you notice PDS reported this morning?

http://finance.yahoo.com/news/precision-drilling-corporation...

There's a ton of information there, which I haven't digested yet. Basically the top line declined because of a drop in drilling activity, causing fixed costs to be spread over a smaller revenue base. But dayrates are holding up because of their 70 new tier 1 rigs. Revenue dropped 7% while drilling activity dropped 23%. I don't think any of that is a surprise. Earnings were a beat -- 0.33 vs. 0.30 expectation. Revenue beat by 1%.

Jim
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement