Q: Thoughts on OGD, would it be a good holding at current levels?
5i Research Answer:
OGD has done well, up 69% in a year, but remains tiny at only $35M market cap, which adds significant risks. It is cheap at 8X earnings but is profitable with decent cash flow. However, debt/obligations are very high, at $35M. For a tiny company in a highly cyclical industry, we would consider this too risky at more than 3X cash flow. In its history it has had many years of losses. We would prefer a larger company in the energy services space.