oil and gas
PASON SYSTEMS $17.26 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403-301-3400; www.pason.com; Shares outstanding: 82.0 million; Market cap: $1.4 billion; Dividend yield: 2.8%) rents equipment for monitoring and managing oil and gas rigs. It also sells communication systems, such as its satellite system, which companies use to remotely collect data from their drilling operations. Pason serves oil and gas producers and drilling contractors throughout Canada, the U.S., Mexico, Argentina and Australia.
In the three months ended September 30, 2012, Pason’s revenue rose 4.9%, to $93.1 million from $88.7 million a year earlier. Cash flow per share was unchanged at $0.50.
Higher international sales and steady drilling activity in the U.S. offset lower revenue in Canada. Pason’s U.S. sales rose 13.8%, to $54.6 million, and international sales jumped 34.0% to $9.4 million. Canadian revenue declined 13.8%, to $29.0 million.
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In the three months ended September 30, 2012, Pason’s revenue rose 4.9%, to $93.1 million from $88.7 million a year earlier. Cash flow per share was unchanged at $0.50.
Higher international sales and steady drilling activity in the U.S. offset lower revenue in Canada. Pason’s U.S. sales rose 13.8%, to $54.6 million, and international sales jumped 34.0% to $9.4 million. Canadian revenue declined 13.8%, to $29.0 million.
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RUSSEL METALS $29.20 (Toronto symbol RUS; TSINetwork Rating: Speculative) (905-819-7777; www.russelmetals.com; Shares outstanding: 60.2 million; Market cap: $1.8 billion; Dividend yield: 4.8%) is one of North America’s largest metal distributors. The company serves its roughly 33,000 customers through 51 locations in Canada and 12 in the U.S.
In the three months ended September 30, 2012, Russel’s revenue rose 1.0%, to $712.6 million from $705.4 million a year earlier. Revenue at its steel distribution division fell 12%, and sales at the metal services business declined 2%. That’s because the slower economy pushed down steel demand. However, the energy tubular products division, which supplies pipes for oil and gas exploration and development, saw its revenue rise 12% on higher drilling activity.
Earnings fell 12.5%, to $22.5 million, or $0.37 a share. A year earlier, Russel earned $25.7 million, or $0.43 a share. The company’s earnings fell even with the higher revenue because steel prices declined in the latest quarter. That cuts Russel’s profit margins and causes it to suffer losses on its current inventory.
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In the three months ended September 30, 2012, Russel’s revenue rose 1.0%, to $712.6 million from $705.4 million a year earlier. Revenue at its steel distribution division fell 12%, and sales at the metal services business declined 2%. That’s because the slower economy pushed down steel demand. However, the energy tubular products division, which supplies pipes for oil and gas exploration and development, saw its revenue rise 12% on higher drilling activity.
Earnings fell 12.5%, to $22.5 million, or $0.37 a share. A year earlier, Russel earned $25.7 million, or $0.43 a share. The company’s earnings fell even with the higher revenue because steel prices declined in the latest quarter. That cuts Russel’s profit margins and causes it to suffer losses on its current inventory.
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ISHARES FTSE/XINHUA CHINA 25 INDEXFUND $41.85 (New York symbol FXI; buy or sell throughbrokers) is an ETF that aims to track the FTSE/XinhuaChina 25 Index, which is made up of the 25 largestand most liquid Chinese stocks. All of the stocks inthe index trade on the Hong Kong exchange....
Pennsylvania-based Vanguard Group is one of theworld’s largest investment management companies.The group manages over $1.7 trillion U.S. in 170mutual funds.
Vanguard, which went into business in 1975,offers low-fee index mutual funds. Generally speaking,Canadians can’t buy units of mutual funds thatare registered in the U.S....
Vanguard, which went into business in 1975,offers low-fee index mutual funds. Generally speaking,Canadians can’t buy units of mutual funds thatare registered in the U.S....
ISHARES MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND $24.70 (New York symbol ESR; buy or sell through brokers), is an ETF that aims to track the MSCI Emerging Markets Eastern Europe Index. The fund’s geographic breakdown is as follows: Russia, 72.2%; Poland, 18.6%; Czech Republic, 3.7%; and Hungary, 3.7%.
The fund’s top holdings are Gazprom (Russia: gas utility), 16.9%; Lukoil (Russia: oil), 11.0%; Sberbank (Russia: bank), 8.7%; Uralkali (Russia: potash), 3.5%; Rosneft Oil Company (Russia: oil and gas), 3.4%; Novatek (Russia: natural gas), 3.4%; Magnit OJSC (Russia: retailing), 3.3%; Tafneft (Russia: oil and gas), 3.2%; Mobile TeleSystems (Russia: wireless), 3.1%; and PKO Bank Polski SA (Poland: banking), 2.9%.
iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.68%.
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The fund’s top holdings are Gazprom (Russia: gas utility), 16.9%; Lukoil (Russia: oil), 11.0%; Sberbank (Russia: bank), 8.7%; Uralkali (Russia: potash), 3.5%; Rosneft Oil Company (Russia: oil and gas), 3.4%; Novatek (Russia: natural gas), 3.4%; Magnit OJSC (Russia: retailing), 3.3%; Tafneft (Russia: oil and gas), 3.2%; Mobile TeleSystems (Russia: wireless), 3.1%; and PKO Bank Polski SA (Poland: banking), 2.9%.
iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.68%.
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SPDR S&P CHINA ETF $68.92 (New York Exchange symbol GXC; buy or sell through brokers; www.spdrs.com) is an ETF that aims to track the S&P China BMI Index, which is made up of all publicly traded Chinese stocks that are available to foreign investors. Right now, SPDR S&P China ETF holds 184 stocks.
The $919.1-million fund’s top holdings are China Mobile, 7.6%; China Construction Bank, 7.5%; Industrial & Commercial Bank, 6.1%; CNOOC Ltd., 4.4%; Tencent Holdings Limited, 4.4%; PetroChina Corp., 3.7%; Bank of China, 3.7%; Baidu, 3.3%; China Life, 2.8%; and China Petroleum & Chemical, 2.4%.
The fund’s breakdown by industry is as follows: Financials, 33.4%; Oil and Gas, 14.9%; Information Technology, 11.4%; Telecommunication Services, 9.7%; Industrials, 9.5%; Consumer Discretionary, 6.1%; Consumer Staples, 5.8%; Basic Materials, 4.9%; Utilities, 2.6%; and Health Care, 1.8%.
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The $919.1-million fund’s top holdings are China Mobile, 7.6%; China Construction Bank, 7.5%; Industrial & Commercial Bank, 6.1%; CNOOC Ltd., 4.4%; Tencent Holdings Limited, 4.4%; PetroChina Corp., 3.7%; Bank of China, 3.7%; Baidu, 3.3%; China Life, 2.8%; and China Petroleum & Chemical, 2.4%.
The fund’s breakdown by industry is as follows: Financials, 33.4%; Oil and Gas, 14.9%; Information Technology, 11.4%; Telecommunication Services, 9.7%; Industrials, 9.5%; Consumer Discretionary, 6.1%; Consumer Staples, 5.8%; Basic Materials, 4.9%; Utilities, 2.6%; and Health Care, 1.8%.
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PENN WEST PETROLEUM $10.70 (Toronto symbol PWT; Shares outstanding: 476.8 million; Market cap: $5.1 billion; TSINetwork Rating: Average; Dividend yield: 10.1%) is one of North America’s largest oil and gas producers. Its production is 66% oil and 34% gas. In the quarter ended September 30, 2012, Penn West’s cash flow per share fell 2.7%, to $0.72 from $0.74 a year earlier. Lower oil and gas prices hurt cash flow, as did a fall in daily output, to 160,339 barrels of oil equivalent from 161,323 barrels.
Penn West has taken on debt, but the resulting investments have failed to increase its production. To improve its performance, it has fired four senior executives and will likely hire outside the company to bring in new expertise.
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CRESCENT POINT ENERGY CORP. $39.03 (Toronto symbol CPG; Shares outstanding: 350.1 million; Market cap: $13.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 7.1%; www.crescentpointenergy.com) produces oil and natural gas in western Canada. Its production is weighted 90% toward oil and 10% to natural gas.
The company continues to focus on its Bakken light-oil development in southeastern Saskatchewan.
In the three months ended September 30, 2012, Crescent Point’s cash flow per share rose 3.7%, to $1.13 from $1.09 a year earlier. The company’s shares yield a high 7.0%. Crescent Point paid out just 62% of its cash flow as dividends in the latest quarter, so its current payout rate looks sustainable.
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The company continues to focus on its Bakken light-oil development in southeastern Saskatchewan.
In the three months ended September 30, 2012, Crescent Point’s cash flow per share rose 3.7%, to $1.13 from $1.09 a year earlier. The company’s shares yield a high 7.0%. Crescent Point paid out just 62% of its cash flow as dividends in the latest quarter, so its current payout rate looks sustainable.
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PRECISION DRILLING CORP. $7.48 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 276.3 million; Market cap: $2.1 billion; Price-to-sales ratio: 1.0; 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 363 rigs in service as of September 30, 2012.
The company is slowly expanding its international operations: it now has a total of eight rigs in Mexico and Saudi Arabia. Precision’s overseas business now accounts for 5% of its revenue, up from just 1% a year ago.
In the three months ended September 30, 2012, the company’s earnings fell 52.8%, to $39.4 million, or $0.14 a share. A year earlier, it earned $83.5 million, or $0.29 a share.
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The company is slowly expanding its international operations: it now has a total of eight rigs in Mexico and Saudi Arabia. Precision’s overseas business now accounts for 5% of its revenue, up from just 1% a year ago.
In the three months ended September 30, 2012, the company’s earnings fell 52.8%, to $39.4 million, or $0.14 a share. A year earlier, it earned $83.5 million, or $0.29 a share.
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