# Oil Services - SDY



## MrMatt (Dec 21, 2011)

Well I was looking and bought a bit of SDY. The numbers look pretty good, except for the last quarter, and I think they're well positioned for an uptick in business. I'm not expecting them to provide outstanding results until things start to warm up a bit, but I'm willing to wait.

In particularly the margins remained good as revenue dropped.


I also considered DAL & AVE on the venture exchange, they also looked quite appealing for similar reasons. However they are both quite a bit smaller.
It would have been nice to get their bump today though.
Any thoughts?


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## HaroldCrump (Jun 10, 2009)

Hostile buyout offer from Total Energy Services at $2.90 a share.
SDY stock is down 40% since late last year, but this is ~ 12% premium above recent price.


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## Value (Jul 31, 2015)

I don't get TOTAL...

They are getting rid of canadian assets at ridicously low prices to reposition in the canadian fields or what?

Anyone can shed some light?


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## doctrine (Sep 30, 2011)

I owned this back in 2012-13 but sold in favour of HWO. Very opportunistic by Total but I would imagine Strad couldn't be in favour given the stock was worth of $5 last year.


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## HaroldCrump (Jun 10, 2009)

Value said:


> I don't get TOTAL...
> They are getting rid of canadian assets at ridicously low prices to reposition in the canadian fields or what?
> Anyone can shed some light?


It's not the same Total


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## MrMatt (Dec 21, 2011)

doctrine said:


> I owned this back in 2012-13 but sold in favour of HWO. Very opportunistic by Total but I would imagine Strad couldn't be in favour given the stock was worth of $5 last year.


Strad is pretty volitile, $3 is still a bit cheap, but I'll break even if they sell at $2.90, due to the great dividend.

The thing I really like, is even in this market they're pretty close to break even.


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## Value (Jul 31, 2015)

HaroldCrump said:


> It's not the same Total



AWWWWWW.... Sorry for my lack of knowledge... Pretty confusing when you don't know all these oil company...

Thanks Harry!


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## HaroldCrump (Jun 10, 2009)

Total says oops, we changed our mind...stock crashing.


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## MrMatt (Dec 21, 2011)

HaroldCrump said:


> Total says oops, we changed our mind...stock crashing.


Poison pill, not a particularly harsh one. I think the issue is that it would allow a LOT of time for another suiter to come in. 
I'm glad management isn't so eager to sell out cheap.


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## doctrine (Sep 30, 2011)

You can't really blame them for not wanting to sell at 70% of book value, but then again, now they're at 58% of book value. 

The company is doing well though, and doesn't have a lot of debt, so while they might cut their dividend, I seriously doubt they're going bankrupt like some other drillers might.


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## HaroldCrump (Jun 10, 2009)

Oops...they should have taken the buyout offer :rolleyes2:


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## doctrine (Sep 30, 2011)

Total is up since the buyout offer, making it even worse on a relative basis.


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## doctrine (Sep 30, 2011)

Strad is being taken private by its CEO and some key insiders at $2.39 a share, a 32% jump today on a pretty nasty day. Strad has been doing well recently and revenue/EBITDA is up quite a bit, although the company is pretty close to only breaking even.

But breaking even is stellar in the oil services space. The offer is at about 76% of book value. 

Many oil services firms are trading at less than 50% of book value. PD, one of the market leaders, is at 30% of book value. 

Just an interesting note. At some point, enough capacity is going to come off that these companies make money again. It's been 5 years of pretty grim times.


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## MrMatt (Dec 21, 2011)

doctrine said:


> Strad is being taken private by its CEO and some key insiders at $2.39 a share, a 32% jump today on a pretty nasty day. Strad has been doing well recently and revenue/EBITDA is up quite a bit, although the company is pretty close to only breaking even.
> 
> But breaking even is stellar in the oil services space. The offer is at about 76% of book value.
> 
> ...


They turn down a buyout offer, price drops, then they make a new offer?
32% premium is too low.

I think it needs 66% to pass, don't know if that excludes insiders.
I'm really getting pissed with these takeovers of my companies.


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## MrMatt (Dec 21, 2011)

They decided to take it private shortly before the release of the new financials.
And the new financials are improving.


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## doctrine (Sep 30, 2011)

Strad just completed the going-private transaction at $2.39, with 99.99% of shares voting for yesterday and all conditions completed today. https://stockhouse.com/news/press-releases/2020/04/21/strad-inc-completes-going-private-transaction

This is interesting for a few reasons; first, that it happened in such a bad environment for service stocks, basically with the buyout at a slight discount to book value, from arguably one of the best performing service stocks in Canada. The second is how much the shares dropped in the last month, despite their being a firm offer with financing arranged supported by all of the insiders. The circular also indicated there was a huge bidding war with up to 6 parties interested from December to February. 

In any case, I bought a bunch of shares in late March from $1.55-1.65 and will now be cashing out at $2.39. Thank you, liquidity-crunch, which took all arbitrage away until just this past few trading days.


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