The Energy Report: Are oil and gas field services in Canada a high growth sector?
Russell Stanley: Energy prices drive oil and gas field
construction and infrastructure development in western Canada. Other
drivers include the need to build out liquefied natural gas (LNG)
facilities and rail facilities.
Jennings Capital targets service companies with market caps in the
$50 to $200 million ($50–200M) range. These names tend to have fewer
analysts following than do the larger names. We like companies that rent
out niche-type equipment at high margins. These firms are typically low
headcount businesses with a lot of operating leverage. Oil and gas
field demand is so strong that these companies must source equipment
externally to extend their fleets and meet commitments. (more)
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