Weekly Performance Update On 6 Offshore Drilling Stocks

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 |  Includes: ATW, DO, ESV, NE, RIG, SDRL
by: Power Hedge

The overall market, as measured by the S&P 500, showed some strength early in the week, climbing to its intra-week high by midday Tuesday. The market then declined slightly but stayed strong on Wednesday before plunging on Thursday. We saw a slight increase on Friday but overall, the market closed the week around the same level as it opened. Oil prices were much less volatile and showed a slow decline throughout the week. As usual, this movement had different effects on the six offshore drilling stocks that are tracked by these weekly updates.

SeaDrill (NYSE:SDRL) opened on Monday, June 18 at $33.70. The stock closed at $33.43 in after hours trading on Friday, June 22. SeaDrill shareholders thus incurred a loss of $0.27 or 0.80% this week. SeaDrill opened at $35.44 on May 29, 2012. This gives the stock a four-week loss of $2.01 per share or 5.67%. On June 14, 2012, John Fredriksen's Hemen Holding reacquired 600,000 shares of SeaDrill that the company previously sold at the end of February. SeaDrill stock fell from its all time high immediately following Hemen's sale at the end of that month. It is unlikely that the reverse will occur due to the purchases, however.

SDRL 5-Day Chart

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Source: Fidelity Investments

SDRL 4-Week Chart

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Source: Fidelity Investments

Ensco (NYSE:ESV) opened at $43.15 on Monday, June 18. The stock closed at $43.45 in after hours trading on Friday, June 22. This gives the stock a gain of $0.30 or 0.70% over the week. The stock opened at $49.01 on May 29. The stock thus incurred a loss of $5.56 or 11.34% over the trailing four-week period. Ensco went ex-dividend on June 7. Shareholders as of that date will receive a payment of $0.375 per share. Shareholders in the stock have seen a loss of $5.185 or 10.58% over the trailing four-week period when the dividend is considered.

ESV 5-Day Chart

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Source: Fidelity Investments

ESV 4-Week Chart

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Source: Fidelity Investments

Transocean (NYSE:RIG) opened at $43.81 on Monday, June 18. The stock closed at $42.67 in after hours trading on Friday, June 22. Transocean's stock thus had a loss of $1.88 or 2.60% this week. The stock opened at $43.77 on May 29. This gives Transocean a loss of $1.10 or 2.51% over the four-week period.

RIG 5-Day Chart

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Source: Fidelity Investments

RIG 4-Week Chart

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Source: Fidelity Investments

Diamond Offshore (NYSE:DO) opened at $60.02 on Monday, June 18. The stock closed at $57.76 in after hours trading on Friday, June 22. This gives the stock a loss of $2.26 per share or 3.77% for the week. The stock opened at $60.91 on Monday, May 29. The stock thus had a trailing four-week loss of $3.15 per share or 5.17%.

DO 5-Day Chart

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Source: Fidelity Investments

DO 4-Week Chart

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Source: Fidelity Investments

Atwood Oceanics (NYSE:ATW) opened at $38.58 on Monday, June 18. The stock closed at $37.01 in after hours trading on Friday, June 22. This gives the stock a loss of $1.57 per share or 4.07% for the week. Atwood opened at $40.88 on May 29. Thus, shareholders in the company incurred a loss of $3.87 or 9.47% over the trailing four-week period.

ATW 5-Day Chart

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Source: Fidelity Investments

ATW 4-Week Chart

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Source: Fidelity Investments

Noble Corp (NYSE:NE) opened the week at $31.08 on June 18, 2012. The stock closed at $29.97 in after hours trading on Friday, June 22. Thus shareholders incurred a loss of $1.11 or 3.57% for the week. Noble opened at $34.10 on May 29, 2012. Thus, the stock had a trailing four week loss of $4.13 or 12.11% over the four-week period.

NE 5-Day Chart

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Source: Fidelity Investments

NE 4-Week Chart

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Source: Fidelity Investments

Ensco was the best performing stock of these six and the only one to see a positive return over the last week. Atwood Oceanics was the worst performer of these six over the last week with both Diamond Offshore and Noble Corp. close behind. Like last week, Transocean was by the best performer of the six over the trailing four week period with Diamond Offshore in second place. None of these companies had a positive return over the trailing four-week period. Noble was the worst performer over the trailing four week period with none of the others anywhere close, except for perhaps Ensco. These stocks seem to be trailing as though investors believe that the companies' earnings are elastic with regards to oil prices. This is an incorrect belief, however, and thus we appear to be presented with some opportunities to pick up these companies on the cheap.

Disclosure: I am long SDRL.