Why Precision Drilling Shares Plunged

Is this meaningful? Or just another movement?

| More on:
The Motley Fool

Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

What: Shares of Precision Drilling (TSX: PD) sank 10% today on news that its largest shareholder exited its entire position in the oilfield services company.

So what: Precision said in a statement that Alberta Investment Management Co (AIMCo) sold its entire 15% stake in an overnight transaction, triggering concern on Bay Street over the stock’s upside going forward. While AIMCo CEO Leo de Bever remains positive on Precision’s fundamentals, he believes that the stock is fairly valued at the moment.

Now what: I’d look into today’s double-digit plunge as a possible buy-in opportunity. “AIMCo acted independently of Precision in both its decision to exit its position and the facilitation of the overnight marketed transaction,” Precision noted in a statement. So while Fools likely won’t be able to replicate AIMCo’s more than 200% return on Precision, the stock’s current levels — down about 20% from its 52-week highs and trading at a forward P/E discount to the industry — seem like a reasonable risk-adjusted entry point.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Brian Pacampara does not own a position in any of the companies mentionedThe Motley Fool does not own a position in any of the companies mentioned.

More on Investing

An investor uses a tablet
Bank Stocks

Where Will TD Stock Be in 5 Years?

Despite ongoing challenges, TD Bank’s strong financial base and focus on growth initiatives could help its stock touch new heights…

Read more »

A airplane sits on a runway.
Dividend Stocks

Where Will Cargojet Stock Be in 1 Year?

Cargojet stock saw a turbulent 2024, but there could be signs that the stock might be on the path to…

Read more »

four people hold happy emoji masks
Bank Stocks

Is BNS Stock a Buy, Sell, or Hold for 2025?

Bank of Nova Scotia is up more than 20% in 2024. Are more gains on the way?

Read more »

Pile of Canadian dollar bills in various denominations
Investing

Here Are My Top TSX Stocks to Buy Right Now

If you’re looking for some top TSX stocks to buy right now, here are two of my top recommendations.

Read more »

A airplane sits on a runway.
Stocks for Beginners

Is AC Stock a Buy Now?

Despite short-term challenges, Air Canada’s improving long-term growth potential makes it an attractive stock to buy now.

Read more »

grow money, wealth build
Dividend Stocks

2 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These ultra-high-yield dividend stocks have resilient payouts, making them reliable investments to generate worry-free passive income.

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

Maximizing Returns Within Your 2025 TFSA Contribution Room

ETFs like the iShares S&P/TSX 60 Index Fund (TSX:XIU) can be great TFSA holdings.

Read more »

hand stacks coins
Dividend Stocks

2 Dividend Stocks to Double Up On Right Now

These two dividend stocks could boost your passive income and strengthen your investment portfolio.

Read more »