CANYON SERVICES GROUP INC. (FRC/TSX)

The position: Top 10 holding; held for more than a year Why do they like it? Canyon, the fourth-largest pressure pumper exclusively focused on Western Canada, boasts a return on capital employed above 20% and doesn’t have any debt.

Mr. Granger noted higher natural gas prices give producers a lot of leeway to expand their capital budgets. “As companies spend more and as Petronas ramps up its LNG plans, spare capacity for pressure pumpers is narrowing,” he said. As a result, he sees a return to pricing power for these names in the second half of 2014.

Biggest risk: Lower energy prices reduce demand.