BST:774

Stock Analysis Report

Executive Summary

AKITA Drilling Ltd. provides provides contract drilling services in Canada and the United States.

Rewards

Trading at 83.9% below its fair value

Revenue is forecast to grow 7.15% per year

Risk Analysis

Shareholders have been substantially diluted in the past year

Currently unprofitable and not forecast to become profitable over the next 3 years

Has less than 1 year of cash runway

Highly volatile share price over past 3 months

+ 1 more risk


Snowflake Analysis

Fair value with imperfect balance sheet.


Similar Companies

Share Price & News

How has AKITA Drilling's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 774's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

9.9%

774

0.7%

DE Energy Services

-0.3%

DE Market


1 Year Return

-77.5%

774

-9.9%

DE Energy Services

14.9%

DE Market

Return vs Industry: 774 underperformed the German Energy Services industry which returned -9.9% over the past year.

Return vs Market: 774 underperformed the German Market which returned 14.9% over the past year.


Shareholder returns

774IndustryMarket
7 Day9.9%0.7%-0.3%
30 Day-16.4%-2.6%-0.1%
90 Day-42.8%-4.1%7.1%
1 Year-75.7%-77.5%-7.5%-9.9%18.5%14.9%
3 Yearn/a-29.9%-39.3%20.0%9.5%
5 Yearn/a-53.5%-71.3%38.0%19.3%

Price Volatility Vs. Market

How volatile is AKITA Drilling's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is AKITA Drilling undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 774 (€0.61) is trading below our estimate of fair value (€3.8)

Significantly Below Fair Value: 774 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 774 is unprofitable, so we can't compare its PE Ratio to the Energy Services industry average.

PE vs Market: 774 is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 774's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 774 is good value based on its PB Ratio (0.2x) compared to the XE Energy Services industry average (0.7x).


Next Steps

Future Growth

How is AKITA Drilling forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

17.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 774 is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: 774 is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: 774 is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: 774's revenue (7.2% per year) is forecast to grow faster than the German market (4.9% per year).

High Growth Revenue: 774's revenue (7.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 774 is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has AKITA Drilling performed over the past 5 years?

-38.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 774 is currently unprofitable.

Growing Profit Margin: 774 is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: 774 is unprofitable, and losses have increased over the past 5 years at a rate of -38.6% per year.

Accelerating Growth: Unable to compare 774's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 774 is unprofitable, making it difficult to compare its past year earnings growth to the Energy Services industry (86.1%).


Return on Equity

High ROE: 774 has a negative Return on Equity (-6.92%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is AKITA Drilling's financial position?


Financial Position Analysis

Short Term Liabilities: 774's short term assets (CA$36.9M) exceed its short term liabilities (CA$27.1M).

Long Term Liabilities: 774's short term assets (CA$36.9M) do not cover its long term liabilities (CA$96.3M).


Debt to Equity History and Analysis

Debt Level: 774's debt to equity ratio (32.5%) is considered satisfactory.

Reducing Debt: 774's debt to equity ratio has increased from 0.08% to 32.5% over the past 5 years.


Balance Sheet

Inventory Level: 774 has a high level of physical assets or inventory.

Debt Coverage by Assets: 774's debt is not covered by short term assets (assets are 0.4x 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: 774 has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if 774 has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is AKITA Drilling's current dividend yield, its reliability and sustainability?

7.88%

Forecast Dividend Yield


Dividend Yield vs Market

company0%marketbottom25%1.4%markettop25%3.6%industryaverage4.3%forecastin3Years7.9%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate 774's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 774's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 774's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 774's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: 774 is not paying a notable dividend for the German market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 774's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

What is the CEO of AKITA Drilling's salary, the management and board of directors tenure and is there insider trading?

7.2yrs

Average management tenure


CEO

Karl Ruud (65yo)

10.4yrs

Tenure

CA$1,094,603

Compensation

Mr. Karl A. Ruud has been Chief Executive Officer and President at Akita Drilling Ltd. since July 2009. Mr. Ruud served as Chief Operating Officer of AKITA Drilling Ltd. from March 2001 to June 2009. He ha ...


CEO Compensation Analysis

Compensation vs Market: Karl's total compensation ($USD828.00K) is above average for companies of similar size in the German market ($USD215.15K).

Compensation vs Earnings: Karl's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

7.2yrs

Average Tenure

52yo

Average Age

Experienced Management: 774's management team is seasoned and experienced (7.2 years average tenure).


Board Age and Tenure

13.6yrs

Average Tenure

64.5yo

Average Age

Experienced Board: 774's board of directors are seasoned and experienced ( 13.6 years average tenure).


Insider Trading

Insider Buying: 774 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$4,87327 Sep 19
Colin Dease
EntityIndividual
Role
Chief Legal Officer
VP, Corporate Secretary & Legal Counsel
Shares7,000
Max PriceCA$0.70
BuyCA$66,30703 Jun 19
Nancy Southern
EntityIndividual
Role
Vice Chairman
Deputy Chairman of the Board
Shares34,800
Max PriceCA$1.91
BuyCA$38,56027 May 19
Fred Hensel
EntityIndividual
Role
Other Key Executive
Vice President of Canadian Operations
Shares15,000
Max PriceCA$2.57
BuyCA$37,60827 May 19
Colin Dease
EntityIndividual
Role
Chief Legal Officer
VP, Corporate Secretary & Legal Counsel
Shares14,500
Max PriceCA$2.91
SellCA$1,088,43203 Apr 19
LRP Luxembourg Holdings SARL
EntityCompany
Shares502,376
Max PriceCA$2.17

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 107.9%.


Management Team

  • Karl Ruud (65yo)

    President

    • Tenure: 10.4yrs
    • Compensation: CA$1.09m
  • Craig Kushner (61yo)

    Director of Human Resources

    • Tenure: 8.9yrs
    • Compensation: CA$343.21k
  • Fred Hensel (58yo)

    Vice President of Canadian Operations

    • Tenure: 0yrs
    • Compensation: CA$298.98k
  • Ray Coleman (52yo)

    Senior VP of AKITA Drilling Ltd. & MD of US Division

    • Tenure: 4.1yrs
    • Compensation: CA$536.24k
  • Colin Dease (44yo)

    VP, Corporate Secretary & Legal Counsel

    • Tenure: 0yrs
    • Compensation: CA$285.78k
  • Lorne Thompson (49yo)

    Vice President of Technical Operations

    • Tenure: 7.2yrs
    • Compensation: CA$363.58k
  • Darcy Reynolds (43yo)

    VP of Finance & CFO

    • Tenure: 2.8yrs
    • Compensation: CA$287.78k

Board Members

  • Nancy Southern (62yo)

    Deputy Chairman of the Board

    • Tenure: 0yrs
    • Compensation: CA$38.13k
  • Charles Wilson (79yo)

    Independent Director

    • Tenure: 17.3yrs
    • Compensation: CA$51.13k
  • Doug Dafoe (64yo)

    Independent Director

    • Tenure: 1.3yrs
  • Linda Southern-Heathcott (56yo)

    Chairman of the Board

    • Tenure: 13.6yrs
    • Compensation: CA$104.13k
  • Karl Ruud (65yo)

    President

    • Tenure: 10.4yrs
    • Compensation: CA$1.09m
  • Dale Richardson (75yo)

    Director

    • Tenure: 26.1yrs
    • Compensation: CA$47.63k
  • Harry Wilmot (66yo)

    Independent Director

    • Tenure: 5.1yrs
    • Compensation: CA$42.13k
  • C. Spitznagel (62yo)

    Director

    • Tenure: 26.1yrs
    • Compensation: CA$42.63k
  • Loraine Charlton (62yo)

    Independent Director

    • Tenure: 13.6yrs
    • Compensation: CA$69.63k
  • Harish Mohan (66yo)

    Independent Director

    • Tenure: 8.3yrs
    • Compensation: CA$64.00k

Company Information

AKITA Drilling Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: AKITA Drilling Ltd.
  • Ticker: 774
  • Exchange: BST
  • Founded: 1964
  • Industry: Oil and Gas Drilling
  • Sector: Energy
  • Market Cap: CA$40.551m
  • Listing Market Cap: CA$27.662m
  • Shares outstanding: 39.61m
  • Website: https://www.akita-drilling.com

Number of Employees


Location

  • AKITA Drilling Ltd.
  • 1000, 333 - 7th Avenue SW
  • Calgary
  • Alberta
  • T2P 2Z1
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AKT.ATSX (The Toronto Stock Exchange)YesClass A Non-Voting Common SharesCACADJan 1993
AKT.BTSX (The Toronto Stock Exchange)Class B Common SharesCACADJan 1993
AKTA.FOTCPK (Pink Sheets LLC)YesClass A Non-Voting Common SharesUSUSDJan 1993
774BST (Boerse-Stuttgart)YesClass A Non-Voting Common SharesDEEURJan 1993

Biography

AKITA Drilling Ltd. provides provides contract drilling services in Canada and the United States. The company is involved in the drilling of oil and gas wells; other forms of drilling related to potash min ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/08 21:52
End of Day Share Price2019/12/06 00:00
Earnings2019/09/30
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.