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CE Franklin Ltd. (CFK) Message Board

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  • tdyaa tdyaa Aug 6, 1998 11:00 PM Flag

    What is this company doing?!

    I also bought at 10 & like a dumbie....bought
    more at 7.
    IBD's report influenced me as well.
    Don't think I'll renew my subscription in Sept. This
    wasn't the only one that had a great writeup & dumped.
    I'm very disappointed. good luck

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    • You guys both seem to have bought CFK w/o doing
      any work on the company (except read a biased article
      in IBD). The fact is that CFK is dirt cheap now, but
      because it's an oil services (really distribution of oil
      services products) company, it's going to move with
      oil/gas prices and the oil services industry (the whole
      group has gotten killed). The core driver for CFK's
      business is the amount of drilling/development activity
      (which is a direct function of oil/gas
      prices).

      CFK is the leader (#1 market share) in distribution
      of oil services products in Canada (a promising
      market, given the amount of pipeline construction being
      done in Canada -- this ought to spark drilling
      activity in Canada, assuming prices improve from current
      levels).

      The company is controlled by Simmons & Company -- a
      well known Texas-based investment firm that
      specializes in the energy industry (I think it's headed by
      Harold Simmons). He's been in CFK for a number of years
      now (and he's probably still making money here at
      $4), and my bet is that he'll look to exit his
      investment in CFK at some point in the next couple years
      (assuming the market rebounds). That's just because
      leveraged buyout firms have a set investment horizon over
      which they must return money to their own
      investors.

      I think the most natural buyer for CFK is National
      Oilwell (CFK's U.S. based competitor). Buying CFK would
      give Natl. Oilwell a leading market position throught
      the U.S. & Canada.

      So, while there are never
      any guarantees (except that IBD is a worthless
      newspaper), I think the investment opportunity at CFK is
      compelling -- you have an interested shareholder in Simmons
      who will look to create value for himself (and other
      shareholders in the process). One just needs the patience to
      see oil/gas prices improve.

      • 1 Reply to bull_dog9
      • Dear bull_dog9,
        I completely agree with your
        assessment! I discovered this stock by just looking up every
        stock on the AMEX. I was amazed that Canada's largest
        oil drilling service company was this dirt cheap in
        price. I noticed that they are buying competitors.
        Although, I ahve not completed my research of the company,
        I am close to start accumulating a position.
        Finally, if the Canadian coulg ever get their crude and
        natural gas to the U.S.,US producers could be hurting!
        They got more gas and oil up there then God has! Will
        Rogers said that they aren't making anymore real estate,
        they sure as hell aren't making anymore gas or crude.
        Start taking a position SLOWLY.

        Roll Tide!