The energy service names are still lagging the overall energy sector, especially the very small names. I've been adding small amounts of Enterprise Group this past week and expect to continue to do so under $0.40. There is a significant seller which is helping to keep a bit of a lid on the stock and I'm happy to accumulate a little more for now. I expect we will see strong numbers when they report Q2 as the sector continues to benefit from strong demand and very strong pricing.
One of favorite energy service companies, Bri-Chem had a good week closing at its 4-year high. BRY.T is up 290% since it made our latest Cheapies With a Chance list January 22, 2022. I think the company is very well positioned to benefit from the very strong growth in drilling in North America. The Baker Hughes drilling rig data continues to show very strong demand. The US/Canada rig count jumped by 30 this past week. In Canada alone the rig count climbed by 20.5% as crews try to make up for lost time after the spring road ban. Drillers are busy and will likely get a lot busier.
The energy trade continues to look like the only game in town but we have to be careful for some sharp pullbacks and we need to be selective and keep some powder dry. There should be plenty of opportunities over the coming years.
Life Science
It's too early for most other sectors but the one I'm watching the closest right now is the life science space. It's been one of the most beat up group of stocks and still hasn't shown any real signs yet that it has found its bottom. While we are seeing some acquisition in the space it still seems to be very correlated to the Nasdaq market. But I do think there is value to be had and I'm hopeful that we start to see some of the smaller names make some of our screens. The one that has perked my interest recently is Ceapro, (CZO.V). It's a "Canadian biotechnology company involved in the development of proprietary extraction technology and the application of this technology to the production of extracts and active ingredients from oats and other renewable plant resources." The company released impressive Q1 results. Revenues jumped 31% and net income jumped 288%. The stock now trades at roughly 11.3 times its trailing 12-month earnings. There are not very many biotech stocks that trade with that low of a PE multiple.
Much like we saw late last year with the energy service companies. We've taken a small position in the company and will be looking for reasons to add. So, while we use a bottom-up approach to stock selecting, we like it when a stock we find starts to correlate with our top-down thesis. Expect to hear more from us on this name.
Hopefully, it's a very early sign that we may see a bit more bullish moves in the sector.
And now for something completely different.
Coming soon to a farm near you....
Cow and sheep burps to be taxed by New Zealand in world first | 
