Black Diamond needs to Diversify

    These are the guys that black Diamond takes care of while they are in the oilfields - principally the Alberta oil fields.Black Diamond provides modular space solutions (MSS)  to oilworkers.This was a growing and profitable space when oil traded at $80-$100 a barrel.For example, Black Diamond (BDI) had revenues of about $285 million in 2015.But the price of oil fell and revenues have fallen to about $165 million in 2018 when the average price of crude oil was $65 a barrel.It was even lower in 2017.These prices still allow for exploration and new drilling but not massive new exploratory work so BDI needs new applications.Still revenues went up 11% over Q1 in 2018.
    First Quarter Results
  Revenue for the quarter was $45 million or up by 11% over 2018.The main reason for this was that revenue for Modular Space Solutions was up 60%.Modular Space Solutions  is their name for workforce accomodations.And this market has picked up considerably with the recent uptick in the price of oil.Black Diamond is hopeful that  sales will continue strongly in B.C.,southern Ontario and U.S.A. where Modular Space Solutions will be used for construction.Despite increased revenues adjusted EBITDA has fallen slightly by 5%.But debt remained constant from 2018.                                  

       In Conclusion  
   Black Diamond has ample debt and credit capacity and does not have a massive amount of shares outstanding(55 million).It should be looking around for a partner that shares some of it's market but  has additional  markets that it does not have.Because BDI cannot continue to rely  on the Alberta oil fields so completely in the future.There are a number of small startup construction companies in Alberta and now is a good time to buy.For example,companies such as Evoko (www.evoko.com) and  Construction Control (www.constructioncontrol.com) that are supposed to be connected to Tecsys. However the connection between Evoko and Construction Control with Tecsys  is not known.In fact, this blog has recommended a stronger combination with  BDI and Tecsys in the past.This may have been too large for both companies.Now is the perfect time for BDI to make a small tuck-in acquisition of a small construction company that widens their market.Until that happens BDI will stay in a range between $1.60 and $2.20 per share.                https://www.blackdiamondgroup.com/our-  businesses/international/https://www.tecsys.com/ https://www.blackdiamondgroup.com/our-businesses/international/