Friday, 25 March 2016

New Purchase - Pason Systems

In February 2015, I bought 100 shares of PSI @ $18.35 and sold them in December 2015 @ $21.23, for a 15.7% capital gain. If you count the $51.00 in dividends received, my total return was 18.5%. However, during this time, I sold a call on these shares which netted me $77.60.  Including this amout, my total return was 22.7% over 9 months. If only I had been so lucky with Ensco (I lost $15,000 on that one).

Anyway, on March 24, 2016, I decided to get back into PSI at a much lower price; 21.8% lower than my sell price.

Number of shares purchased
Price per share
Total cost per share
Total cost
Annual dividend per share
Initial dividend yield
Increase in forward 12-month dividends

PSI isn't doing so well. Since the decline in oil, they've shrunk their work force by 25% and EPS have not been very stable:


On the bright side, the company has no debt and basically controls market share in Canada (94%), USA (61%), Australia (85%) and Latin America (70%). 

With this purchase, my 12-month forward dividend income is $10,418.


  1. I've never looked into PSI but I do have some experience with dealing with at least some of their systems at work. I don't know how the customers feel about Pason, for rig data monitoring/collecting, but I personally prefer to use MD Totco which does the same thing except they're owned by NOV. At least I'm pretty sure they're owned by NOV. Where I work, primarily in Texas and Louisiana the majority of the rigs use Totco. So seeing the market share at 60% for the US is surprising to me. There's not a big difference between the 2 though but Totco seems to be a bit more user friendly and allows more autonomy for me to change what data is going to where. So whenever one of the E&P companies asks for other information to be sent over I can make the changes myself but with Pason I usually have to make 2-3 phone calls because, in my experience, they don't seem to get it fixed right the first time.

    1. Thanks for the info. It's great to get feedback from someone that has first had experience with Pason's products.

      I got the numbers from their 2014 annual report and admitedly was wooed by them. I think they will do well when oil rebounds. Management expects 2016 to be a tough year and I'm willing to wait it out. If the share price quickly rebounds, I'll probably sell a call one my shares as I don't see this as a long term hold.

  2. I'm not at all familiar with PSI -- thanks for sharing. Along with the stock price drop, yield has climbed from about 1.94% to 4.13%. That's a great yield! Best of luck with your investment.

    FerdiS, DivGro

    1. The dividend yield is definitely interesting but 2015 EPS doesn't cover the dividend which i don't really like. But I think oil will recover and when it does, Pason will do well.

      Good luck with your recent purchases - I had noticed that You've been busy in March.