This drilling company, our top growth pick for 2018, almost died during the energy price swoon, says Benj Gallander, value investing expert and editor of Contra the Heard.

Cathedral Energy (Toronto: CET; OTC: CETEF) traded north of $15 dropped to the 30 penny level in 2015.

The major slowdown in the energy sector dropped revenues precipitously from about $275 million to $81 million. That hurt the bottom line where red ink became the flavor of the day. 

But management worked with the bank and while Cathedral had to make concessions and do some deal making, the company has knocked debt down from more than $56 million to less than $1 million.

Revenues jumped in the last quarter to $36 million, up 85 percent from the quarter a year ago. That pushed the number up 106 percent year-to date. That turned the bottom line profitable with earnings approaching $2 million.

Though a Canadian company based in Calgary, Cathedral does much of its work in the United States. Some of their equipment is quite specialized, which helps to distinguish this enterprise from others in the sector.

The billionaire Wilks brothers from Texas have been major investors in this company. Often their purchase of shares in companies precedes excellent price appreciation.

Cathedral is poised for growth as it has been demonstrating over the past year.  Of course, future expansion largely depends on how things go in the oil and gas patch. Certainly prices around where they are now will help. But even if they drop, The stock has positioned itself to do well in a more difficult market.

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