TSX:SHLE

Stock Analysis Report

Source Energy Services

Executive Summary

Source Energy Services Ltd. produces, supplies, and distributes Northern White frac sand used primarily in oil and gas exploration and production in Western Canada and the United States.

Snowflake

Fundamentals

Mediocre balance sheet and slightly overvalued.


Similar Companies

Share Price & News

How has Source Energy Services's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-18.2%

SHLE

-1.9%

CA Energy Services

-0.2%

CA Market


1 Year Return

-85.1%

SHLE

-37.2%

CA Energy Services

1.1%

CA Market

Return vs Industry: SHLE underperformed the Canadian Energy Services industry which returned -37.2% over the past year.

Return vs Market: SHLE underperformed the Canadian Market which returned 1.1% over the past year.


Shareholder returns

SHLEIndustryMarket
7 Day-18.2%-1.9%-0.2%
30 Day-19.6%-12.1%-3.3%
90 Day-33.8%-18.8%-1.6%
1 Year-85.1%-85.1%-35.4%-37.2%4.6%1.1%
3 Yearn/a-44.1%-48.2%13.1%3.1%
5 Yearn/a-69.6%-72.9%24.7%6.7%

Price Volatility Vs. Market

How volatile is Source Energy Services's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Source Energy Services undervalued compared to its fair value and its price relative to the market?

37.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: SHLE (CA$0.45) is trading below our estimate of fair value (CA$0.72)

Significantly Undervalued: SHLE is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SHLE is unprofitable, so we can't compare its PE Ratio to the Energy Services industry average.

PE vs Market: SHLE is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

Low PEG Ratio: Insufficient data to calculate SHLE's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: SHLE is good value based on its PB Ratio (0.1x) compared to the CA Energy Services industry average (0.8x).


Next Steps

Future Growth

How is Source Energy Services forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

13.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SHLE is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: SHLE is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: SHLE is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: SHLE's revenue (9.6% per year) is forecast to grow faster than the Canadian market (5.7% per year).

High Growth Revenue: SHLE's revenue (9.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: SHLE is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has Source Energy Services performed over the past 5 years?

-7.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SHLE is unprofitable, and losses have increased over the past 5 years at a rate of -7.4% per year.

Accelerating Growth: Unable to compare SHLE's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: SHLE is unprofitable, making it difficult to compare its past year earnings growth to the Energy Services industry (15.8%).


Return on Equity

High ROE: SHLE has a negative Return on Equity (-15.94%), as it is currently unprofitable.


Return on Assets

ROA vs Industry: SHLE is currently unprofitable, so its Return on Assets is negative.


Return on Capital Employed

ROCE Improving: SHLE is currently unprofitable, so its Return on Capital Employed is negative.


Next Steps

Financial Health

How is Source Energy Services's financial position?


Financial Position Analysis

Short Term Liabilities: SHLE's short term assets (CA$113.4M) exceeds its short term liabilities (CA$67.6M)

Long Term Liabilities: SHLE's short term assets (113.4M) do not cover its long term liabilities (244.9M)


Debt to Equity History and Analysis

Debt Level: SHLE's debt to equity ratio (67.9%) is considered high

Reducing Debt: Insufficient data to determine if SHLE's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: SHLE has a high level of physical assets or inventory.

Debt Coverage by Assets: SHLE's debt is not covered by short term assets (assets are 0.6x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable SHLE has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: SHLE is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 69.5% per year.


Next Steps

Dividend

What is Source Energy Services's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.0%markettop25%6.0%industryaverage5.6%forecastin3Years0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate SHLE's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate SHLE's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

Stable Dividend: Insufficient data to determine if SHLE's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SHLE's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SHLE's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

What is the CEO of Source Energy Services's salary, the management and board of directors tenure and is there insider trading?

1.4yrs

Average board tenure


CEO

Brad Thomson (62yo)

0yrs

Tenure

CA$1,494,662

Compensation

Mr. Bradley J. Thomson, also known as Brad, serves as the Chief Executive Officer and President of Source Energy Services Ltd and Source Energy Services Canada LP. Mr. Thomson has been the Vice President o ...


CEO Compensation Analysis

Compensation vs. Market: Insufficient data to establish whether Brad's total compensation is reasonable compared to companies of similar size in the Canadian market.

Compensation vs Earnings: Brad's compensation has been consistent with company performance over the past year.


Board Age and Tenure

1.4yrs

Average Tenure

54yo

Average Age

Experienced Board: SHLE's board of directors are not considered experienced ( 1.4 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$4,44805 Dec 18
Bradley Thomson
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares3,475
Max PriceCA$1.28
BuyCA$4,41018 Nov 18
Bradley Thomson
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares3,000
Max PriceCA$1.47
BuyCA$11,29806 Nov 18
Derren Newell
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares5,900
Max PriceCA$1.92
BuyCA$191,00006 Nov 18
Alan Hanlon
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares100,000
Max PriceCA$1.91
SellCA$191,00006 Nov 18
James McMahon
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares100,000
Max PriceCA$1.91

Ownership Breakdown


Management Team

  • Derren Newell (50yo)

    Chief Financial Officer

    • Tenure: 0yrs
    • Compensation: CA$805.59k
  • Brad Thomson (62yo)

    CEO, President & Director

    • Tenure: 0yrs
    • Compensation: CA$1.49m
  • Scott Melbourn

    Chief Operating Officer

    • Tenure: 0yrs
    • Compensation: CA$834.06k
  • Shawn Furlong

    Health & Safety Director

    • Tenure: 0yrs
    • Compensation: CA$294.70k
  • Orson Ross

    Vice-President of Finance

    • Tenure: 0yrs
    • Compensation: CA$327.04k

Board Members

  • Jeff Belford (54yo)

    Independent Director

    • Tenure: 2.7yrs
    • Compensation: CA$130.55k
  • Mick MacBean (51yo)

    Independent Director

    • Tenure: 0.7yrs
  • Brad Thomson (62yo)

    CEO, President & Director

    • Tenure: 0yrs
    • Compensation: CA$1.49m
  • Jim McMahon (60yo)

    Independent Director

    • Tenure: 2.7yrs
    • Compensation: CA$142.10k
  • Stew Hanlon (59yo)

    Independent Chairman of the Board

    • Tenure: 0.7yrs
    • Compensation: CA$149.90k
  • Carrie Lonardelli (43yo)

    Independent Director

    • Tenure: 0.6yrs
  • Ken Seitz (48yo)

    Independent Director

    • Tenure: 1.4yrs
    • Compensation: CA$112.21k

Company Information

Source Energy Services Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Source Energy Services Ltd.
  • Ticker: SHLE
  • Exchange: TSX
  • Founded: 2017
  • Industry: Oil and Gas Equipment and Services
  • Sector: Energy
  • Implied Market Cap: CA$28.648m
  • Market Cap: CA$26.844m
  • Shares outstanding: 60.95m
  • Website: https://www.sourceenergyservices.com

Number of Employees


Location

  • Source Energy Services Ltd.
  • 438 — 11th Avenue S.E.
  • Suite 500
  • Calgary
  • Alberta
  • T2G 0Y4
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SHLETSX (The Toronto Stock Exchange)YesCommon SharesCACADApr 2017
S4ODB (Deutsche Boerse AG)YesCommon SharesDEEURApr 2017
SCEY.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDApr 2017

Biography

Source Energy Services Ltd. produces, supplies, and distributes Northern White frac sand used primarily in oil and gas exploration and production in Western Canada and the United States. It also provides s ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 00:42
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.