Chris Boxall talks about small cap energy services opportunities in the latest IG video
Small cap energy services
In a recent video for IG, Chris Boxall, fund manager at Fundamental Asset Management, covers opportunities in the small cap energy service space.
KBC Advanced Technologies (AIM:KBC), a stock discussed in a previous video, has now attracted 2 bids at substantial premiums to the share price before. The video covers other potential recovery plays in the beleaguered energy services sector.
While fabricator Lamprell (LAM) does not appear to possess any compelling technology its business is in much better shape than during the last downturn with a cash rich balance sheet. An MOU signed with Saudi Aramco and Hyundai Heavy Industries in January in connection with a potential partnership collaboration on establishing a Maritime Complex in Saudi Arabia is an interesting development.
Flowtech Fluidpower (AIM:FLO), the UK’s leading distributor of technical fluid power products, has performed strongly at the operating level since listing in 2014 and its expansion strategy into hydraulics also appears to be developing nicely with acquisitions made at sensible prices that are set to repay themselves in quick time. The fluid power sector doesn’t generate too much excitement but, as it has demonstrated over the past 8 years through some challenging times, this little business could do very nicely over the long term.
Pressure Technologies (AIM:PRES), the manufacturer of high pressure systems, has a past firmly rooted in the world of offshore oil and gas. While it’s core oil and gas markets are currently in the doldrums the Group’s Alternative Energy division appears to be making considerable progress. This was highlighted recently when they held a capital markets day focusing on the market opportunity and business strategy for this expanding area of the business. The Alternative Energy division supports the upgrading of Biogas as a solution to waste management and renewable energy supply. The purchase of the assets of its technology provider, Greenlane, in October 2014 has given the division a worldwide platform for selling biogas upgrading technology.
Cape (CIU) is a large provider critical industrial services to the energy and natural resources sectors, encompassing access systems, insulation, specialist coatings, fire protection, refractory linings, and oil and gas storage tanks. Employing over 17,000 people around the world it has a significant global presence. While market considitions are obviously tough, a November 2015 trading update reassured that they were on track to deliver 2015 financial year earnings in line with expectations. A dividend yield of over 6% offers some reward to the patient.
To find out more please watch the latest video