Hi Charles,
Sorry about the slower response time on this one. The bad news with High Arctic is that it operates in a highly cyclical industry and when drilling rates are low, this company will have a hard time. ON the flip side in a bullish oil & gas and LNG environment, service companies like High Arctic tend to do a little better but it is only after companies start to meaningful increase their CAPEX.
While oil prices have gone up materially, the pace of drilling has lagged. This is notable in YoY revenue for High arctic which has dropped from 210M at its peak in 2017 to 69M of the past twelve months. It also dealt wiht several operational shutdowns due to the Pandemic. I'd say here, you are effectively selling at the bottom.
The good news is that the stock has perked up this year, up 12% and if commodity prices can stay in this area or continue rising, we may see an uptick in drilling activity which may bode well for high arctic. If one can afford to wait, it may be wise to do so as the environment does point to a new upswing. The company alluded to this 'inflection point' on its last quarterly call. It also generated enough cash to declare a 0.20 special dividend so that is a good sign and it has built a strong cash position.
Of note, rig operations in PNG began last week and could be a key catalyst for the company.
If I owned HWO here, I'd be waiting a little longer to see how it performs as it 'should' do well in this environment. Definitely not without risk though and drilling companies make for tough investments.
Mat