Why Precision Drilling Corp Shares Plunged

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Precision Drilling Corp  sank 10% today on news that its largest shareholder exited its entire position in the oilfield services company.

So what: Precision said in a statement that Alberta Investment Management Co (AIMCo) sold its entire 15% stake in an overnight transaction, triggering concern on Wall Street over the stock's upside going forward. While AIMCo CEO Leo de Bever remains positive on Precision's fundamentals, he believes that the stock is fairly valued at the moment.

Now what: I'd look into today's double-digit plunge as a possible buy-in opportunity. "AIMCo acted independently of Precision in both its decision to exit its position and the facilitation of the overnight marketed transaction," Precision noted in a statement. So, while Fools likely won't be able to replicate AIMCo's more than 200% return on Precision, the stock's current levels -- down about 20% from its 52-week highs and trading at a forward P/E discount to the industry -- seem like a reasonable risk-adjusted entry point.

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The article Why Precision Drilling Corp Shares Plunged originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool owns shares of Precision Drilling Trust. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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