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, was down this week. The S&P 500 opened the week at 1362.53 and closed at 1354.68 according to Yahoo Finance. Meanwhile, oil prices were relatively flat and closed just above where they opened the week. With that said, both markets experienced some volatility during the week. The S&P 500 showed considerable strength early in the week and remained well above its opening price until Friday. Oil prices also showed some strength early in the week but saw a correction on Friday that resulted in a decline from the strength earlier in the week. As usual, this overall market action had different effects on the six offshore drilling stocks that I follow in these weekly updates.

SeaDrill (SDRL) opened on Monday, July 2 at $35.79. The stock closed at $35.49 in after hours trading on Friday, July 6. SeaDrill shareholders thus suffered a capital loss of $0.30 or 0.84% over the past week. SeaDrill opened at $34.14 on June 11, 2012. This gives the stock a four-week gain of $1.35 per share or 3.95%.

SDRL 5-Day Chart

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Source: Fidelity Investments

SDRL 4-Week Chart

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Source: Fidelity Investments

Ensco (ESV) opened at $47.00 on Monday, July 2. The stock closed at $47.09 in after hours trading on Friday, July 6. This gives the stock a gain of $0.09 or 0.20% over the past week. The stock opened at $44.85 on June 11. Stockholders in the company thus saw a gain of $2.24 or 5.00% over the four-week period.

ESV 5-Day Chart

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Source: Fidelity Investments

ESV 4-Week Chart

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Source: Fidelity Investments

Transocean (RIG) opened at $44.95 on Monday, July 2. The stock closed at $44.68 in after hours trading on Friday, July 6. Transocean's stock thus suffered a loss of $0.27 or 0.60% this week. The stock opened at $42.59 on June 11. This gives Transocean a gain of $2.09 or 4.91% 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 (DO) opened at $59.28 on Monday, July 2. The stock closed at $58.75 in after hours trading on Friday, July 6. This gives the stock a loss of $0.53 per share or 0.89% for the week. The stock opened at $60.59 on Monday, June 11. The stock thus had a trailing four-week loss of $1.84 per share or 3.04%.

DO 5-Day Chart

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Source: Fidelity Investments

DO 4-Week Chart

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Source: Fidelity Investments

Atwood Oceanics (ATW) opened at $37.76 on Monday, July 2. The stock closed at $38.90 in after hours trading on Friday, July 6. This gives the stock a gain of $1.14 per share or 3.02% for the week. Atwood was thus one of the few offshore drilling stocks to see significant movement over the past week. Atwood opened at $39.77 on June 11. Thus, shareholders in the company experienced a loss of $0.87 or 2.19% 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 (NE) opened the week at $32.53 on July 2, 2012. The stock closed at $33.01 in after hours trading on Friday, July 6. Thus shareholders experienced a gain of $0.48 or 1.48% for the week. Noble opened at $32.07 on June 11, 2012. Thus, the stock had a trailing four week gain of $0.46 or 1.43% over the four-week period. Last week, 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

Atwood Oceanics was by far the best performer out of these six over the past week. Diamond Offshore was the worst although SeaDrill did not do much better. Out of these six stocks, only Diamond Offshore, SeaDrill, and Transocean delivered losses over the past week (albeit small ones). The remaining three all delivered gains to their respective investors. Ensco was the best performer of these six over the trailing four-week period with Transocean coming in at a very close second place. Of these six companies, only two, Atwood Oceanics and Diamond Offshore, saw losses over the trailing four-week period. Diamond Offshore was the worst performer of these six over the trailing four week period. SeaDrill signed a new contract recently for the use of one of its older rigs. This contract reinforces my convictions that the offshore drilling industry retains very strong fundamentals.

Disclosure: I am long SDRL.