Well Positioned for a Resources Rebound

Article Excerpt

MAJOR DRILLING. $14.31 (Toronto symbol MDI; SI Rating: Speculative) (www.majordrilling.com; 1-866-264- 3986; Shares outstanding: 23.7 million; Market cap: $339.3 million) is a large drilling company that mainly serves the mining industry. In the three months ended October 31, 2008, Major Drilling’s revenues rose 22.4%, to $191 million from $156.1 million. Excluding one-time items, its earnings rose 28.5%, to $29.3 million, or $1.23 a share, from $22.8 million, or $0.97 a share. Cash flow rose 24.3%, to $38.9 million, or $1.64 a share, from $31.3 million, or $1.31 a share. Major Drilling holds cash of $39 million, or $1.65 a share. Long-term debt is low at $32.1 million, or 9% of market cap. The shares yield 2.7%. In the latest quarter, more operating drilling rigs and an acquisition boosted Major’s Canadian and U.S. revenues by 22.5%, to $63.7 million. Its South American revenues rose 21.2%, to $9.5 million, as strong demand in Argentina and Chile more than offset lower revenues in Venezuela and Ecuador…