PHX Energy Services

PHX Energy Services - PHX . TSX

This is what I thought in May 2020 when I first bought the stock...

This oil and gas drilling rig contractor had spent the last few years expanding its base of operations from its home base in Canada into the more dynamic US market and building out its fleet of high-tech “Velocity” drill rigs. After several years of losses, they reported surprisingly robust earnings in the first quarter of 2020, just before the oil sector collapsed. Hoping that those profits might return as economic activity rebounded and the world worked through its glut of oil, I initiated a position at prices under $1.00. A low p:b ratio, the potential for more sustained profitability on an economic recovery and a modest debt load had me choosing this stock to place a contrarian bet on the eventual recovery of the oil sector.