MCCOY GLOBAL $3.71 - Toronto symbol MCB

MCCOY GLOBAL $3.71 (Toronto symbol MCB; TSINetwork Rating: Speculative)(780-453-8451; www.mccoyglobal.com; Shares outstanding: 27.7 million; Market cap: $102.7 million; Dividend yield: 5.4%) sold its heavy-duty truck-trailer unit last year and is now focused on its Energy Products and Services segment, which sells hydraulic gear, including power tongs, for drilling rigs worldwide. (Power tongs are large wrench-like tools that tighten and loosen the pipe in the drill hole.)

In 2013, this division opened its first two international sales and service centres. One is in Aberdeen, Scotland, and supports customers in the North Sea area. The other is in Singapore and serves clients in the Asia-Pacific region. McCoy recently opened another centre, in Dubai, to supply the Middle East.

Global client base lowers risk

The company’s revenue rose 8.3% in the three months ended December 31, 2014, to $27.2 million from $25.1 million a year earlier. Excluding one-time items, earnings jumped to $1.5 million, or $0.06 a share, from $372,000 or $0.02, as McCoy successfully cut its costs. The fourth quarter is typically the company’s slowest period.

Even with falling oil and gas prices, McCoy is forecast to earn $0.35 a share in 2015, up slightly from $0.34 in 2014. Drilling activity has slowed, particularly in North America, but the company’s clients include global drilling giants, like Weatherford, Baker Hughes, Halliburton and Tesco, which have a broad geographic reach and a wide range of customers.

The company holds cash of $29.9 million, or $1.08 a share, and has no debt. The stock yields a high 5.4%, and the dividend appears safe.

McCoy is a buy for aggressive investors.

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