Two resource-services firms with gains ahead

Article Excerpt

Demand for Major Drilling’s specialized services, especially from senior gold producers, including Australia’s largest mining companies, is recovering. Meanwhile, Computer Modelling is benefiting from expanding oil and gas drilling in response to higher energy prices. We think there are still gains ahead for both stocks and their investors. MAJOR DRILLING, $10.66, is a buy. This large contract driller (Toronto symbol MDI; TSINetwork: Speculative) (; Shares outstanding: 82.4 million; Market cap: $893.9 million; No dividends paid) mainly serves the mining industry. Demand for Major’s specialized drilling services, especially from senior gold producers, continues to rebound. In the quarter ended April 30, 2022, revenue jumped 48.3%, to $190.0 million from $128.1 million a year earlier. More specifically, revenue in the Canada-U.S. region increased 47.0%, South and Central American revenue increased by 46.3%, and Asian and African operations reported 56.6% higher revenue. Along with the higher revenue, Major Drilling reported higher profits in the latest quarter. The company made $22.4 million, or $0.27 a share. That’s up sharply from $2.3 million,…

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