Seeking Alpha
Growth at reasonable price, long/short equity, foreign companies, master limited partnerships
Profile| Send Message| ()  

The overall market was broadly down over the past week, although virtually all of this loss came between market close on Monday and market open on Tuesday. The broad index was quite volatile, with numerous dips and rallies over the week, but overall was flat from Tuesday to Friday. The volatility did make for an exciting week for traders. The oil markets, meanwhile, were also quite volatile and were up very slightly over the week. This is due mostly to fears of Hurricane Sandy, which is currently predicted to hit the New Jersey/Philadelphia area. This is the center of the East Coast refining industry. As usual, these market developments had different effects on the seven offshore drilling stocks that I track in this weekly update series.

Seadrill (SDRL) opened on Monday, October 22 at $41.26. The stock closed at $40.09 in after hours trading on Friday, October 26. Seadrill shareholders thus witnessed a loss of $1.17 or 2.84% over the past week. Seadrill opened at $39.96 on October 1, 2012. This gives the stock a trailing four-week gain of $0.13 per share or 0.33%. Seadrill made two announcements this week that could be potentially beneficial for shareholders. The first of these is the company's announcement that it has signed a heads of agreement for the potential purchase of the Songa Eclipse ultra-deepwater semi-submersible rig from Songa Offshore. Seadrill also increased its stake in Asia Offshore Drilling to 64.23% and will be making a mandatory cash offer for the entire company. I will have analyses of these two developments posted to this site over the next few days if possible.

SDRL 5-Day Chart

Source: Fidelity Investments

SDRL 4-Week Chart

Source: Fidelity Investments

Ensco (ESV) opened at $59.05 on Monday, October 22. The stock closed at $58.13 in after hours trading on Friday, October 26. Shareholders thus suffered a loss of $0.92 or 1.56% over the past week. The stock opened at $54.98 on October 1. Stockholders in the company thus experienced a gain of $3.15 or 5.73% over the trailing four-week period. Stock ratings site TheStreet.com reiterated its BUY rating on Ensco on Thursday, citing strong revenue and earnings growth relative to peers.

ESV 5-Day Chart

Source: Fidelity Investments

ESV 4-Week Chart

Source: Fidelity Investments

Transocean (RIG) opened at $48.60 on Monday, October 22. The stock closed at $46.39 in after hours trading on Friday, October 26. Transocean's shareholders thus suffered a loss of $2.21 or 4.76% this week. The stock opened at $46.08 on October 1. This gives Transocean stock a gain of $0.31 or 0.67% over the trailing four-week period. A U.S. District judge rescheduled the trial to establish liability for 2010's Macondo oil spill to February 25, 2013. Uncertainty over the liability related to this incident has been a drag on both the company and the stock since 2010 and so this trial delay means that the uncertainty will continue to hang over the stock for longer than originally expected.

RIG 5-Day Chart

Source: Fidelity Investments

RIG 4-Week Chart

Source: Fidelity Investments

Diamond Offshore (DO) opened at $70.16 on Monday, October 22. The stock closed at $70.05 in after hours trading on Friday, October 26. Shareholders of Diamond Offshore thus suffered a loss of $0.11 per share or 0.16% for the week. The stock opened at $66.56 on Monday, October 1. The stock thus had a trailing four-week gain of $3.49 per share or 5.24%. Diamond Offshore will go ex-dividend on October 30. Shareholders as of the close of the market on the previous day will receive total dividends of $0.875 per share.

DO 5-Day Chart

Source: Fidelity Investments

DO 4-Week Chart

Source: Fidelity Investments

Atwood Oceanics (ATW) opened at $49.28 on Monday, October 22. The stock closed at $47.76 in after hours trading on Friday, October 26. This gives the stock a loss of $1.52 per share or 3.18% for the week. Atwood opened at $45.70 on October 1. Thus, shareholders in the company profited from a gain of $2.06 or 4.51% over the trailing four-week period.

ATW 5-Day Chart

Source: Fidelity Investments

ATW 4-Week Chart

Source: Fidelity Investments

Noble Corp (NE) opened the week at $39.58 on October 22, 2012. The stock closed at $38.22 in after hours trading on Friday, October 26. Thus, shareholders suffered a loss of $1.36 or 3.44% for the week. Noble opened at $36.06 on October 1, 2012. Thus, the stock had a trailing four week gain of $2.16 or 5.99%. Noble will go ex-dividend on November 1. Shareholders as of the close of the market on the previous day will receive a dividend payment of approximately $0.13 per share.

NE 5-Day Chart


Source: Fidelity Investments

NE 4-Week Chart

Source: Fidelity Investments

Pacific Drilling (PACD) opened the week at $10.18 on October 22, 2012. The stock closed at $10.09 in after hours trading on Friday, October 26. Thus, shareholders witnessed a loss of $0.09 or 0.88% for the week. Pacific Drilling opened at $10.02 on October 1, 2012. Thus, the stock had a trailing four week gain of $0.16 or 1.60%.

PACD 5-Day Chart

Source: Fidelity Investments

PACD 4-Week Chart

Source: Fidelity Investments

All seven of these stocks witnessed losses over the past week and gains over the trailing four-week period. The best performer (the stock with the smallest loss) over the past week was Diamond Offshore, which was almost completely flat. None of the others had performance close to Diamond Offshore, although Pacific Drilling delivered an admirable performance. The worst performer over the past week was Transocean, with none of the others particularly close. Noble was the best performer over the trailing four-week period with Diamond Offshore in a close second. Seadrill was the worst performer over the trailing four-week period, being almost completely flat over the period. Transocean delivered a performance that was just slightly better than Seadrill's. Seadrill has some of the best growth prospects of any company on this list so if it continues to lag then that could mean that there is opportunity here for a savvy investor.

Source: Weekly Performance Update On 7 Offshore Drilling Stocks