Is Shawcor Still Discounted?

Shawcor (TSX:SCL) is an Ontario-based oilfield services company. Energy stocks have been hit hard by falling oil and gas prices over the past month. Shares of Shawcor have plunged 12% month-over-month as of close on February 10.

These dips bring a familiar dilemma for investors – whether to jump on the plunge or not. In the case of Shawcor, the stock has already climbed 2% week over week.

This came after shares fell into technically oversold territory at the end of January and early February. The stock rose 3% on February 10. This has pushed shares outside of this enticing territory.

Is there still a reason to move on the stock today? Investors can expect to see its fourth quarter and full-year results for 2019 in early March. In the third quarter the company saw revenue fall 4% year-over-year to $394 million.

However, adjusted EBITDA climbed 17% from the prior year to $42 million. Its order backlog dropped by $10 million from the prior year to $509 million.

Shawcor expects results to decline year-over-year in its Q4 earnings report but it is optimistic entering fiscal 2020. This is because of rising demand in its U.S. market.

Shawcor stock may have moved out of technically oversold territory, but it still boasts nice value. The stock last possessed a price-to-earnings ratio of 14 and a price-to-book value of 0.7, both favourable levels relative to industry peers.

To top it off the stock offers a quarterly dividend of $0.15 per share, representing a strong 5.4% yield.

Shares of Shawcor still offer attractive value in the middle of February.