Thoughts on ESI.TO ?

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Hi Dan,

I’ve held Ensign Energy Services for a long time and thinking about cutting my losses and selling my position. It’s at a 52 week low. Do you see any upside for this stock?

Thanks again,

Sharon

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Asked on July 3, 2019 1:48 am
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For what its worth. I also held ESI for a long time and cut my losses last year. At some point, you just need to take your lumps and move on.  I agree with Dan's analysis of the dividend, which is one of the reasons i cut the stock loose.

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Posted by Mathieu Litalien
Answered on July 3, 2019 11:32 pm
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The company has been struggling mightily in terms of earnings over the past 5 quarters. They've missed the mark every quarter on earnings and missed on revenue twice.

It's dividend is getting out of control, and with a 120% payout ratio and a 11+ percent yield, it wouldn't be out of the question to see a slash. Coupled with that, the company has an extremely high debt load. With only $122 million cash on hand and almost $2 billion dollars in debt, they seem to have backed themselves into a corner right now, and with the way oil and gas is going it might be tough for them to get out.

Analysts actually have this stock pegged at near 70% one year upside, which is perplexing to say the least.

Overall, I think it's a stock that has struggled mightily and may continue to struggle in the future. A similar situation I can think of is Cardinal Energy. The company ended up cutting its dividend just before Christmas of 2018 and the stock plummeted.

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Posted by Dan Kent
Answered on July 3, 2019 2:48 am