Thanks,
John
PHX has had very strong momentum over the last year and is also cheap at 6.3x forward earnings. Most recent quarterly earnings showed some weakness with revenue flat and profit falling 22%. PHX stated in its outlook, "it believes the declining US rig count has stabilized and this new level of activity will be sustained in the upcoming quarters, while Canadian operations continue to benefit from the addition of new technologies." Outlook for 2024 forecasts a drawdown while 2025 will bounce back with good growth. It pays a high yield at 8.97% and the balance sheet is fine. It did stop dividends in 2016 however. The business is highly cyclical. PHX's performance will be heavily tied to the energy sector, so investor sentiment regarding energy will be the main factor influencing the decision to buy.
ET we think is solid and growth has been strong recently. The most recent quarter was a record. The valuation is still attractive at 14x forward earnings with a high yield at 5%. We think its momentum has been solid fueled by growth and we are comfortable starting a small position here.