ATW, founded in 1968 provides various rigs, such as semi submersible, semi submersible tender assist, jack-up drilling, submersible drilling, and modular platform rigs. It also offers various services to third party owners of drilling rigs, such as supply of personnel and rig design, fabrication, installation and operation.
ATW has offshore operations in Southeast Asia, Africa, Australia, the Black Sea and the U.S. Gulf of Mexico. The company currently owns and operates a fleet of eight drilling rigs including five semi submersible rigs, two jack-up drilling rigs, and one submersible rig. The firm employs 1,100 people.
Currently, seven of the eight active drilling units are owned and operated by Atwood Oceanics Pacific Limited (a Cayman Islands subsidiary). ATW is in the process of constructing a new jack-up drilling unit (the Atwood Aurora) in Brownsville, Texas, which is expected to be delivered by September 2008 at an expected cost of around $160 million.
This business model has proven to be quite successful in generating impressive financial results and company growth. Its current market capitalization is over $1.8 billion and annual revenue exceeds $300 million. The growth data includes a year over year quarterly revenue rise of 55.6% which was also experienced during the most recent quarter, and a 66.26% revenue increase over last year. Net income grew 190.64% over the last year and has risen an average of 27.54% annually over the course of the past five years.
Even with such a high growth rate, ATW has maintained a significant 11.32% return on assets [ROA] and a robust return on equity [ROE] of 21.51% over the past twelve months which is in the top 25% of the industry.
Our multi factor model continues to calculate that the valuation of the stock is at a reasonable level when compared both to its peers and other mid cap growth companies. A strong indicator of this is found in a relatively modest price to earnings to growth [PEG] ratio of 0.109 over the past year.
Disclosure: Atwood Oceanics Inc. (ATW) is held in the Clear Mid Cap Growth portfolio which is managed as a separate account. Mr. Corn is the CEO of Clear Asset Management LLC and owns ATW directly through the Clear Mid Cap Growth portfolio.
ATW 1-yr chart