Weekly Performance Update On 6 Offshore Drilling Stocks

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

This week proved to be an interesting one for the overall market, as measured by the S&P 500. The S&P showed some strength early in the week and rose overall from Monday until Wednesday. It declined again on Thursday and spent much of that day around the same levels as it opened on Monday. Friday, however, was a completely different story. The S&P 500 rocketed up with the announcement that the EU will allow the European Stability Mechanism (ESM) to recapitalize banks. This resulted in the biggest daily percentage gain in both the S&P 500 and the NASDAQ since December. Oil also skyrocketed on the news, gaining almost 10% on Friday. Naturally, this resulted in some movement in the stocks of the six offshore drilling companies that I track in this weekly series. Let's see how each was affected.

SeaDrill (NYSE:SDRL) opened on Monday, June 25 at $32.94. The stock closed at $35.43 in after hours trading on Friday, June 29. SeaDrill shareholders thus saw a gain of $2.49 or 7.56% this week. SeaDrill opened at $31.78 on June 4, 2012. This gives the stock a four-week gain of $3.65 per share or 11.49%.

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 $43.29 on Monday, June 25. The stock closed at $47.05 in after hours trading on Friday, June 29. This gives the stock a gain of $3.76 or 8.69% over the week. The stock opened at $44.19 on June 4. Stockholders in the company thus saw a gain of $2.86 or 6.47% over the 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 benefited from a gain of $3.235 or 7.32% over the trailing four-week period when the dividend is considered. Ensco ordered a new ultra-deepwater drillship on Tuesday, June 26 in order to meet the rising demand for ultra-deepwater rigs. This should provide a boost to the company's cash flows once it is delivered in the fourth quarter of 2014.

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 $42.47 on Monday, June 25. The stock closed at $44.61 in after hours trading on Friday, June 29. Transocean's stock thus had a gain of $2.14 or 5.04% this week. The stock opened at $40.62 on June 4. This gives Transocean a gain of $3.99 or 9.82% over the trailing 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 $57.62 on Monday, June 25. The stock closed at $59.06 in after hours trading on Friday, June 29. Diamond Offshore thus had one of the smallest percentage gains of any of the companies tracked here. The stock had a gain of $1.44 per share or 2.50% for the week. The stock opened at $57.72 on Monday, June 4. The stock thus had a trailing four-week gain of $1.34 per share or 2.32%.

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 $36.43 on Monday, June 25. The stock closed at $37.84 in after hours trading on Friday, June 29. This gives the stock a gain of $1.41 per share or 3.87% for the week. Atwood opened at $37.02 on June 4. Thus, shareholders in the company experienced a gain of $0.82 or 2.22% 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 $29.58 on June 25, 2012. The stock closed at $32.35 in after hours trading on Friday, June 29. Thus shareholders experienced a gain of $2.77 or 9.36% for the week. Noble opened at $30.66 on June 4, 2012. Thus, the stock had a trailing four week gain of $1.69 or 5.51% over the four-week period. Stephens upgraded Noble to an overweight with a $46 price target. This could potentially apply some upward pressure.

NE 5-Day Chart

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Source: Fidelity Investments

NE 4-Week Chart

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Source: Fidelity Investments

Noble Corp was the best performing stock of these six in the past week, although both Ensco and SeaDrill managed to also deliver admirable performances. Diamond Offshore was the worst performer over the six. All six stocks saw gains over the past week. SeaDrill was the best performer of these six over the trailing four-week period with Transocean as the only one that is anywhere close (but even then, there is a notable performance gap). Shareholders in all six of these companies did see gains over the period, however. Atwood Oceanics was the worst performer of the six over the trailing four-week period with Diamond Offshore very close behind. Ensco's purchase of a new ship reinforces my conviction that this is a growing industry and is one that should be in every investor's radar.

Disclosure: I am long SDRL.