2024-03-26 02:01:49 ET
Summary
- Transocean's revenue and backlog are growing, and debt is under control, but it's too early to be bullish on the company.
- The average daily revenue per rig has been increasing, and the backlog has seen meaningful improvements.
- Cash flows have taken a hit, and the utilization rate of the fleet is not inspiring confidence.
When it comes to the offshore drilling industry, one of the companies that investors absolutely must know about is Transocean ( RIG ). With a sizable fleet at its disposal, the firm is a very large player in this industry. But unfortunately, that alone does not make it an attractive investment. Late last year, in the middle of November to be precise, I ended up writing an article on the firm that took a rather neutral stance. At the time, the overall trend for backlog and revenue for the company had been positive. But its bottom line was painful because of increased expenses. This, combined with house shares were priced, led me to rate the company a 'hold' to reflect my view that the stock should perform more or less along the lines of the broader market for the foreseeable future....
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Transocean: The Picture Is Looking Up, But It's Too Early To Get Excited