It has been a difficult year to find stocks that have done well in the market. To find a stock that has had staggering returns has been even rarer. I know because I've had a few disasters like Bear Stearns (NYSE: BSC), which will soon be folded up into JP Morgan Chase (NYSE: JPM), and is only one among many financial nightmares.
A while back I reported in Chasing Value: Precision Drilling up 46% since December that one of my picks was having an amazing year. The first quarter is behind us and the dream continues. Precision Drilling Services TR (NYSE: PDS), continues to rise while it is drilling down, increasing from $15.47 when I originally reviewed it to last night's close at $24.75.
This 60% jump is on top of the 10% dividend yield, which by itself is quite satisfactory. From the many people that follow my rants and raves, I sometimes get suggestions or questions that lead me in a certain direction. I have to share credit with a good friend of mine, Joe G., for shining a light on Precision Drilling. He was right that it was worth a look and of course I shared my findings with everyone when I recommended the stock three months ago.
The stock is nearing its 52-week high of $27.89, but it still only has a P/E of 9 (TTM) and might be worth buying on dips. In particular I would find it suitable for a Roth IRA where you can collect the dividend tax free no matter where the daily price gravitates too. Precision is continuing to expand in the United States and there remains the possibility of being taken over by a larger enterprise given its current $3.1 billion market value, which is small for companies in the oil and gas sector.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of PDS.
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Reader Comments (Page 1 of 1)
4-15-2008 @ 8:44PM
Mr. noitall said...
What can I say, I like it, I own it, thanks for writing about it, and thank Joe G. for me, Sheldon.
You have to admit that timing is important here too. If you recommended it a year ago, instead of 3 months ago, we would be looking at losses right now. That's more proof that "buy & hold" is dead. It's not that easy to make profits investing any where nowadays. I say you have to be in the right place at the right time, and you also have to know about when to get out. Just read some of the articles that were written about a year ago by stock pickers and analysis, who in the past I'm sure had great success.