Two Resource Service Stocks: 1 Buy, 1 Hold

Article Excerpt

MAJOR DRILLING. $25.40 (Toronto symbol MDI; SI Rating: Speculative) (; 1-866-264- 3986; Shares outstanding: 23.2 million; Market cap: $587.7 million) is one of the world’s largest drilling service companies serving the mining industry. Its principal business is mineral exploration drilling for mining and mineral exploration companies. In the three months ended October 31, 2006, Major Drilling’s revenues rose 18.8%, to a record $101.8 million from $85.8 million. Ongoing earnings rose 60.9%, to a record $13 million or $0.56 a share, from $8.1 million or $0.36 a share. Cash flow per share was $0.86 a share in the latest quarter. Major Drilling holds cash of $36.8 million or $1.59 a share. Long-term debt is low at $20.2 million or 10% of equity. Major Drilling continues to benefit from high prices of nickel, copper, gold, silver and zinc, which spur exploration activity. The company has also diversified its drilling services into the energy sector. It currently has seven rigs drilling for oil and gas…

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