Investment Thesis
Standard Drilling (OTC:SDSDF) has been trading at a discount to book value in just under a year now. Some initial criticism was that the conservative valuation assumed by the company was not conservative enough. However, after recent fleet sales above book value, the argument carries little weight.
Term rates have continued to improve, the company now has a larger percentage exposure to large-size PSVs, and a larger portion of the book value is in the form of cash. Despite this, the stock is trading at its largest discount to book value