The Canadian stocks we’ve dug up have net assets valued by the market at $0.10 on the dollar or less
SmallCapPower | June 8, 2020: COVID-19 concerns hit the stock market valuations of most companies but some are now trading at levels that appear to be ‘ridiculously’ cheap. Today we have discovered three Canadian stocks with net assets valued at $0.10 on the dollar or less.
*Returns are based on closing stock prices as of June 4, 2020
AKITA Drilling Ltd. (TSX:AKT.A) – $0.34
AKITA Drilling was formed in January 1993, and now has a fleet of 40 high-spec drilling rigs with operations in major resource basins in the United States and Canada. On May 5, 2020, the Company reported first-quarter (ended March 31, 2020) revenue of $53,572,000, up from $52,342,000 during the same period last year, while Adjusted EBITDA for the quarter increased by 28% to $11,646,000. AKITA did, however, take an impairment charge of $60 million during Q1 2020. The market is currently valuing AKITA Drilling’s net assets at just $0.07 on the dollar.
- Year-to-Date Return: – 71%
Bri-Chem Corp. (TSX:BRY) – $0.095
Bri-Chem provides wholesale distribution and blending of oilfield drilling, completion, stimulation and production chemical fluids. The Company sells, blends, packages and distributes a full range of drilling fluid products from 26 warehouses throughout Canada and the United States. Bri-Chem has been operating in Canada since 1985 and expanded into the United States in 2011. On May 12, 2020, the Company reported a 17% year-over-year decline in revenue to $21.4 million. Bri-Chem had working capital of $15.6 million as at March 31, 2020. The market is currently valuing Bri-Chem’s net assets at just $0.10 on the dollar.
- Year-to-Date Return: – 5%
Ensign Energy Services Inc. (TSX:ESI) – $0.76
Ensign Energy Services is a provider of oilfield services, operating in Canada, the United States and internationally. The Company is engaged in land-based drilling and well servicing contractors, serving crude oil, natural gas and geothermal operators. Its services include contract drilling, directional drilling, underbalanced and managed pressure drilling, rental equipment and well servicing. On May 11, 2020, Ensign announced first-quarter revenue that fell 14% year over year to $383.9 million. ESI had working capital of $147.4 million as at March 31, 2020. The market is currently valuing Ensign Energy Services’ net assets at just $0.08 on the dollar.
- Year-to-Date Return: – 67%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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