SAExploration Holdings Inc (NASDAQ: SAEX) is having an incredibly strong start to the trading session in the pre-market hours this morning after the company announced that it has been awarded a new project that’s worth approximately $100 million. Of course, the news excited investors, sending the stock screaming for the top. Today, we’ll talk about:
- The contract award;
- what we’re seeing from SAEX stock as a result; and
- what we’ll be watching for ahead.
SAEX Rockets On Contract Award
As mentioned above, SAExploration is having an incredibly strong start to the trading session in the pre-market hours this morning after the company announced an award. In a press release issued early this morning, the company said that it received a letter of award for a new marine project in South Asia. The project will be completed for a major National Oil Company and could bring SAEX gross proceeds in the amount of $100 million. It is expected that the project will begin late in the fourth quarter of 2018 and end in the second quarter of 2019.
It is important to note that about 70% of the revenue involved in this project is considered pass-through revenue, which will make its way to a large subcontractor. SAEX said that any pass-through revenue will be at cost with no margin. Also, the timing and outcome of the project is dependent on the company entering a final contract with the customer as well as various factors outside of the company’s control.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of SAExploration, the news proved to be overwhelmingly positive. After all, $100 million in revenue, $30 million of which is not pass-through revenue is a massive amount of money. So, it comes as no surprise that the project is leading to excitement among investors who are sending the stock screaming for the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:47), SAEX is trading at $10.69 per share after a gain of $0.40 per share or 3.89% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on SAEX. In particular we’re interested in following this new project award to see if it does indeed take place. As mentioned above, the project and timing of the project is subject to various conditions outside of the company’s control. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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