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Highlands Natural Resources partner Calfrac - how close is it to going bust?

By Tom Winnifrith | Wednesday 1 June 2016


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Shares in Highlands Natural Resources (HNR) jumped sharply last week on news that its DT technology had been licensed to a large Canadian firm Calfrac. Great. Fabbo. What's the problem? Er.....

Shimple Sheeples!. Have a look at Calfrac's last quarterlies here. It is loss making and its debt C$877 million dwarfs its equity (C$576 million). In the last quarter it shut one major site, mothballed others and canned its dividend. Capex has been squeezed to almost nothing. Its debt now trades at 50 cents in the dollar and consequently one might assume that its financial position looks to be pretty much fucked.

Naturally the Bulletin Board Morons do not care about such matters. Let the orders flow from Calfrac. Whatever... Highland shares remain a stonking sell.


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