Topics Growth Stocks

McCoy Global $1.85 - Toronto symbol MCB

MCCOY GLOBAL $1.85 (Toronto symbol MCB; TSINetwork Rating: Speculative) (780-453-8451; www.mccoyglobal.com; Shares outstanding: 27.7 million; Market cap: $51.3 million; No dividends paid) sells power tongs and other hydraulic gear for oil and gas drilling rigs. (Power tongs are large wrench-like tools that tighten and loosen the pipe in the drill hole.)

The company has international sales and service centres in Singapore, Dubai and Scotland.

In the three months ended March 31, 2016, McCoy’s revenue fell 72.3%, to $7.2 million from $25.8 million a year earlier. Low oil and gas prices prompted clients to cut back on equipment purchases.

The company lost $9.4 million, or $0.34 a share, compared to a profit of $2.2 million, or $0.08 a share. The latest quarter included one-time after-tax charges that totalled $4.4 million.

Drilling activity has slowed, particularly in North America. In response, McCoy has undertaken a number of cost-cutting measures. These include reducing its workforce by 50% since early 2015.

The company holds cash of $21.9 million, or $0.79 a share, and has no debt. McCoy needs higher oil and gas prices to push up drilling, but it’s well-positioned to profit when activity rebounds.

McCoy is a buy for aggressive investors.

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