In the wake of a protracted sector-wide decline in the oil & gas industry in North America, many investors who have bought and held positions in recent years may be tempted to sell said positions for a loss and take the associated tax break which comes along with said losses. With the vast majority of firms on the TSX in the oil & gas sector following the benchmark oil prices lower, an opportunity exists for value investors to pick up shares as many sell into the "tax loss" season which is now upon us.
The latter months of any fiscal year can be an excellent time for value hunters to pick up stocks at an extra cheap level by engaging in a contrarian stock picking strategy focusing on companies in the most beaten up sectors.
One such company in the oil & gas arena which has impressive upside potential, should the oil glut continue to decline over time is Trican Well Service Ltd. (TSX:TCW). Trican is a Canadian pressure pumping company which is focused on the natural gas industry and has a strong market position in a segment which has begun to rebound of late.
The company reported an impressive earnings beat this past quarter and management has continued to support a healthy outlook moving forward, providing investors with a very decent investment story, given the company’s current valuation multiples.
Trading at around half of Trican’s historical levels, this company is perhaps one of the best positioned in the sector to take advantage of opportunities as they arise, given the company’s strong balance sheet and cash position.
Invest Wisely, my friends.
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