PRECISION DRILLING CORP. $8.91 - Toronto symbol PD

PRECISION DRILLING CORP. $8.91 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 276.1 million; Market cap: $2.5 billion; Price-to-sales ratio: 1.3; No dividends paid since February 2009; TSINetwork Rating: Extra Risk; www.precisiondrilling.com)
provides contract drilling services to land-based oil and gas producers, mainly in North America. It had 337 rigs in service at the end of 2011.

The company continues to gain as oil producers step up their drilling activity to take advantage of rising oil prices. In 2011, Precision’s revenue rose 36.5%, to $1.95 billion from $1.4 billion in 2010. Earnings soared 344.4%, to $193.5 million, or $0.67 a share, from $43.5 million, or $0.15 a share.

Demand for the company’s Super Series horizontal-drilling rigs is rising. Horizontal drilling involves drilling wells at an angle to reach isolated pockets of oil or gas. Precision built 19 Super Series rigs in 2011. It will build 35 more in 2012.

Precision’s earnings could jump to $1.34 a share in 2012. The stock trades at just 6.6 times that estimate.

Precision Drilling is a buy.

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