The market was up this week as measured by the S&P 500 which climbed from 1299.19 to 1317.82. The market was rather volatile during the week, reaching its weekly high on Tuesday, then bottoming on Wednesday, before recovering in the latter half of the week. Crude oil was much less volatile but did see a very slight decline to its close at $90.86. As usual, the stocks of the six offshore drilling companies that I track in these weekly updates reacted differently to the market action.
SeaDrill (SDRL) opened on Monday, May 21 at $36.23. The stock closed at $35.04 in after hours trading on Friday, May 25. This gives the stock a loss of $1.19 or 3.28% this week. SeaDrill opened at $38.48 on April 30, 2012. This gives the stock a four-week loss of $3.44 per share or 9.49%. SeaDrill went ex-dividend on May 22, 2012.
Shareholders as of that date will receive a dividend of $0.97 which consists of a $0.82 per share regular dividend and a $0.15 per share special dividend. Therefore, the loss over the past week was $0.22 or 0.61% when the dividend is included in the return. The four-week loss is $2.47 or 6.82% when the dividend is included in the return.
SDRL 5-Day Chart
click to enlarge
Source: Fidelity Investments
SDRL 4-Week Chart
Source: Fidelity Investments
Ensco (ESV) opened at $47.71 on Monday, May 21. The stock closed at $48.54 in after hours trading on Friday, May 25. This gives the stock a gain of $0.83 or 1.74% over the week. The stock opened at $54.20 on April 30. The stock thus had a loss of $5.66 or 10.4% over the four-week period.
ESV 5-Day Chart
Source: Fidelity Investments
ESV 4-Week Chart
Source: Fidelity Investments
Transocean (RIG) opened at $42.51 on Monday, May 21. The stock closed at $43.34 in after hours trading on Friday, May 25. Transocean thus had a gain of $0.83 or 1.95% this week. The stock opened at $49.93 on April 30. This gives Transocean a loss of $6.59 or 13.20% over the four-week period.
RIG 5-Day Chart
Source: Fidelity Investments
RIG 4-Week Chart
Source: Fidelity Investments
Diamond Offshore (DO) opened at $59.33 on Monday, May 21. The stock closed at $60.56 in after hours trading on Friday, May 25. This gives the stock a gain of $1.23 per share or 2.07% for the week. The stock opened at $67.84 on Monday, April 30. The stock thus had a four-week loss of $7.28 per share or 10.73%. Diamond Offshore went ex-dividend on April 27, 2012. Shareholders of the stock as of this date will be receiving a total dividend of $0.875 per share. Thus, the stock's total loss over the four-week period is $6.405 or 9.44% after accounting for dividends.
DO 5-Day Chart
Source: Fidelity Investments
DO 4-Week Chart
Source: Fidelity Investments
Atwood Oceanics (ATW) opened at $38.94 on Monday, May 21. The stock closed at $40.42 in after hours trading on Friday, May 25. This gives the stock a gain of $1.48 per share or 3.80% for the week. Atwood opened at $43.64 on April 30. Thus, shareholders in the company suffered a loss of $3.22 or 7.38% over the four-week period.
ATW 5-Day Chart
Source: Fidelity Investments
ATW 4-Week Chart
Source: Fidelity Investments
Noble Corp (NE) opened the week at $32.22 on May 21, 2012. The stock closed at $33.81 in after hours trading on Friday, May 25. This gives the stock a gain of $1.59 or 4.93% for the week. Noble opened at $37.74 on April 30, 2012. Thus, the stock had a four week loss of $5.52 or 14.63% over the four-week period. Noble went ex-dividend on May 3, 2012. Shareholders of the stock as of this date will receive a dividend of approximately $0.14 per share. If we include this into the four week return then we get a total loss of approximately $5.38 per share or 14.26%.
NE 5-Day Chart
Source: Fidelity Investments
NE 4-Week Chart
Source: Fidelity Investments
Noble Corp was the best performing stock of these six over the past week after accounting for dividends. SeaDrill was the worst performer of these six over the past week and was the only one of the group to post a loss for the week even when the large regular and special dividends are included in the returns. SeaDrill was, however, the best performing stock over the four-week period after accounting for dividends. Noble Corp was the worst performer over the trailing four week period although every one of these six stocks suffered a four week loss. The fundamentals for the offshore drilling sector remain quite strong and the market is most certainly not reflecting that. The market environment over the past month has made all of these stocks significantly cheaper than a month ago. The overall industry fundamentals, however, have actually improved during the same time period. This could be a buying opportunity.
Disclosure: I am long SDRL.
