This $2 Stock Could Gain Almost 50%
Civeo Corporation (NYSE: CVEO) a leading provider of workforce accommodations with prominent market positions in the Canadian oil sands and the Australian natural resource regions, has secured two contracts expected to total approximately US$90 million in revenues.
The company operates 19 lodges and villages with approximately 24,000 rooms; 7 open camp properties; and a fleet of mobile accommodation assets. It serves oil and natural gas, mining, and oilfield and mining service companies.
According to GlobeNewswire,
The first contract, in Australia, awarded a room commitment from Whitehaven Coal Mining Limited to provide rooms and hospitality services from the Company’s existing Boggabri and Narrabri accommodations facilities.
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The contract is for an initial three-year time period, with a minimum room commitment and an option to extend for an additional two years. It is anticipated the initial commitment will generate approximately A$22 million in total revenues.
The second contract, in Canada, awarded a hospitality services contract to operate a 1,540-room facility for an oil sands operator in Canada with expected revenues totaling approximately C$100 million over the initial term. The contract is for an initial term of five years with an option to extend for an additional five years.
Bradley J. Dodson, Civeo’s President and Chief Executive Officer, said,
“These new contracts across our operating regions in both Canada and Australia demonstrate the strength and quality of our service offerings and are consistent with our strategy of continuing to win work at our current lodges while expanding our offering of hospitality services to customer owned facilities.
These contracts were already contemplated in the preliminary 2019 guidance communicated on our third quarter 2018 earnings conference call.”
One analyst noted, “companies that offer vital services to the commodities players so that they can operate more efficiently and focus on their own core businesses.
One such example here is Civeo Corp., a provider of accommodations and related products and services for oil and gas, as well as mining companies located throughout Canada, Australia, and even the US.
Recently, investor optimism in the business, after having suffered as energy prices tanked once again late last year, has helped the firm to recover some.
The latest driver behind this move higher has been news that the business just landed two new contracts, which will collectively drive significant revenue and, in turn, value for shareholders, for the enterprise for the next few years.”
The chart confirms this bullish outlook.
CVEO should be considered a buy if this price move continues.
Look for an entry at $2.61 with a price target of at least $3.90 based on the pattern in the chart.