The Successful Investor Hotline – Friday, December 6, 2013

Article Excerpt

PRECISION DRILLING CORP., $9.75, Toronto symbol PD, sells contract drilling services to oil and natural gas producers. The stock fell sharply after the Alberta Investment Management Company (AIMCo) sold its entire 15% stake in the company for $9.50 to $9.75 a share. AIMCo is a Crown corporation that manages Alberta’s public-sector pension plans and other special funds. Precision ran into trouble in 2009, because the credit crisis hurt its ability to refinance short-term loans it needed to buy U.S.-based contract driller Grey Wolf Inc. That’s when AIMCo purchased notes and shares in Precision. AIMCo originally bought its shares for just $3.00 each, so it looks like the fund decided to lock in a substantial profit before the end of the year. Meanwhile, Precision’s outlook remains bright. Rising oil and gas prices should spur demand for its drilling services. As well, the company probably received $48 million because of AIMCo exercising its share-purchase warrants. That’s equal to 2% of its $2.7-billion market cap. The…