# Pulse Seismic



## OptsyEagle (Nov 29, 2009)

I couldn't help but post this quote from the CEO in Pulse Seismic's 4th Quarter earnings release:

http://finance.yahoo.com/news/pulse-seismic-inc-reports-2015-021000596.html



> *"With weak commodity prices, a poor industry outlook and no sales visibility, it would be easy to dwell on the negative. We are not doing so,"* stated Neal Coleman, Pulse's President and CEO.


I just thought that was a pretty good way to put it, instead of going on for paragraph after paragraph. I haven't quite seen it laid out quite like that by many oil services companies, but it probably should be.

He goes on to say:



> "Pulse is firmly positioned to survive an extended downturn: costs are at a record low, we have no capital commitments or debt, and we are able to act on opportunities for counter-cyclical acquisitions to enlarge our main asset and expand future revenue-generating capacity."


Anyway, for anyone looking for an oily stock that really can't not make it through this downturn since they have no debt, very low operating costs and very high profit margins on its seismic data library sales with a very high moat/barrier to entry. Unfortuneately, no dividend at this time but they do take most of their positive cash flow and buy back a lot of stock as do some of the insiders from time to time.

I am not pumping the stock, I just found the CEOs summary of the situation quite amusing, this morning.

https://www.canadianinsider.com/company?menu_tickersearch=psd


----------



## TurryInAHurry (Feb 6, 2016)

Hey OptsyEagle,

I was just introduced to this stock a couple months back, and have somewhat been following since. I came across the information on the release as well about a week ago. I haven't had the time to engage in more research in the company as i've been wanting to. 
Can you explain how a they are protected by a high moat/barrier to entry?


Appreciated.


----------



## OptsyEagle (Nov 29, 2009)

The cost of a seismic survey is very high. As such, Pulse tends to share this cost with a company that requires the seismic picture but retains 100% ownership of the seismic image of the area. At this point they have now built up, through past surveys and from buying out competitors, a vast library of seismic surveys. Since it is much cheaper to buy a previously surveyed image then to reproduce it, very, very few surveyed areas ever get reproduced by a competitor. Hence they have a monopoly on the seismic surveys of this vast amount of resource rich land.. That is a very, very large moat against competition.

That being said, this is still a very risky stock, since their competitor right now is "not drilling for oil at all", since if one wants to drill they pretty much need these surveys to find the optimum spot to start the hole and know how deep to go.

On top of this high barrier to entry, now that Pulse has this library, their cost to operate is really just turning on the lights in the head office in the morning and answering the phone when a customer calls. I am sure it is a lot quieter in the office these days then it was two years ago, but unless all drilling in Western Canada stops completely, you can be sure the phone will ring...and it has been. More then enough to maintain a cash flow positive situation for shareholders and maybe someday things will get better.


----------



## Feruk (Aug 15, 2012)

The assets are good, the concept's decent, but... This stock's priced as if they 'd seen far less than the 75% drop in revenue year over year that occurred. I just don't see the value at this price...


----------



## OptsyEagle (Nov 29, 2009)

Feruk said:


> The assets are good, the concept's decent, but... This stock's priced as if they 'd seen far less than the 75% drop in revenue year over year that occurred. I just don't see the value at this price...


Well maybe it will become clearer when the stock is at $5.00 a share.

Just kidding with ya. Your guess is as good as mine, certainly in the short term. In the long term you will find it quite hard to find a business model that works as well as Pulse Seismic's. It is just too bad that the price of oil and gas went the way it did. Anyway, when the dust settles for the oil industry, Pulse Seismic will still be there and you can't really say that about many other oil/gas services companies.

Good luck to all. It should be noted that this is still a risky investment.


----------

