Precision Drilling Shares Climb On CEO Departure

The market reacted to Tuesday’s announcement that Precision Drilling Trust (PDS) CEO Hank Swartout is leaving the company sometime this year by sending its units up 5%.

One reason could be that investors probably prefer a senior manager that is interested in buying Precision units, rather than selling them as Mr. Swartout did for most of his company holdings last fall, according to Canaccord Adams’ Andrew Bradford.

The other explanation laid out by the analyst in a note to clients is that some investors suspect Mr. Swartout is looking to take Precision private with the help of a private equity partner.

“For what it’s worth, we don’t place much stock in the likelihood of Mr. Swartout spearheading a go-private initiative for Precision, although nothing would surprise us when it comes to Mr. Swartout or Precision,” Bradford wrote.

He maintained his “buy” rating and C$32.50 price target on Precision.