Transocean (RIG) Shares Might Need a Second Look
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Shares of Transocean (NYSE: RIG) were upgraded this morning by Tudor Pickering...from Hold to Accumulate. The stock is currently up $0.08 (+0.20%) to $41.01, despite opening down $0.43 vs. yesterday's close.
Transocean shares have been falling for almost the past 12 months, but the real chart to look at is the 2 year. RIG fell about 50% in April-May 2010 after the huge BP (NYSE: BP) oil spill in the Gulf of Mexico (GOM) was blamed in part on Transocean. The stock then became a value play, and shares just about doubled (from $40 to almost $80) between June 2010 and April 2011.
Several positive stories in 2011 helped the stock move higher including 1) the company closing in on a world record for water drilling depth; 2) firm FMR adding a 6% stake in the company (for 10% total),; and 3) a few upgrades by large Wall Street firms.
Nonetheless, by mid-2011 shares made a u-turn and headed south. Despite BP's attempt to pursue Halliburton (NYSE: HAL) for GOM damages, investors weren't buying it. Then came Brazil...which literally almost banned offshore oil drilling as another oil spill (much smaller) happened. So with the potential loss of Brazilian business, still pending litigation from GOM, a 26 million equity offering, and a large earnings miss...Wall Street firms peppered the stock with downgrades.
For the finale, RIG's CFO announces his resignation (Jan 5, 2012)
Well, now, the worst just may be over. In Dec. Global Hunter upgraded shares to Hold (from Sell), Barclays issued comments on the sector for 2012. This week, Barron's made positive comments on the company and today, Tudor Pickering upgraded shares from Hold to Accumulate. After the GOM oil spill, shares rebounded...now the stock is hovering around a 52-wk low (since mid-Nov) and it just might be time to get back in the water.
Transocean shares have been falling for almost the past 12 months, but the real chart to look at is the 2 year. RIG fell about 50% in April-May 2010 after the huge BP (NYSE: BP) oil spill in the Gulf of Mexico (GOM) was blamed in part on Transocean. The stock then became a value play, and shares just about doubled (from $40 to almost $80) between June 2010 and April 2011.
Several positive stories in 2011 helped the stock move higher including 1) the company closing in on a world record for water drilling depth; 2) firm FMR adding a 6% stake in the company (for 10% total),; and 3) a few upgrades by large Wall Street firms.
Nonetheless, by mid-2011 shares made a u-turn and headed south. Despite BP's attempt to pursue Halliburton (NYSE: HAL) for GOM damages, investors weren't buying it. Then came Brazil...which literally almost banned offshore oil drilling as another oil spill (much smaller) happened. So with the potential loss of Brazilian business, still pending litigation from GOM, a 26 million equity offering, and a large earnings miss...Wall Street firms peppered the stock with downgrades.
For the finale, RIG's CFO announces his resignation (Jan 5, 2012)
Well, now, the worst just may be over. In Dec. Global Hunter upgraded shares to Hold (from Sell), Barclays issued comments on the sector for 2012. This week, Barron's made positive comments on the company and today, Tudor Pickering upgraded shares from Hold to Accumulate. After the GOM oil spill, shares rebounded...now the stock is hovering around a 52-wk low (since mid-Nov) and it just might be time to get back in the water.
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