Transocean Faces Tough Sailing

If Schlumberger (SLB - commentary - Cramer's Take) is going down, Transocean (RIG - commentary - Cramer's Take) will be next. This company's so cheap, but at the same time, look what cheap has done to Nabors (NBR - commentary - Cramer's Take) and to Halliburton (HAL - commentary - Cramer's Take). These last two trade at levels that would tell you that oil is going down much further or that all of the onshore projects will be canceled.

And that's the problem with Transocean. It's offshore, and those projects will begin to lose lots of money with oil at these prices. Sure, oil won't stay down forever, and Transocean is really well run, but I said that on TV about Schlumberger yesterday, and where did it get me?

RIG's got contracts out until 2012 that have gigantic day rates. These are hard contracts to get out of, but I have to believe that some of them have been rented by the ubiquitous hedge funds hoping to scalp a gain and sell them to others, and certainly some are just rented by gunslinger companies that are running out of money at these prices.

I would normally not suggest selling this one because it is inexpensive and really the best of breed. But when I see SLB down three, I can only contemplate how low RIG could go if analysts or the company lower the boom.

Random musings: If Wynn Resorts (WYNN - commentary - Cramer's Take) gets hit like this, I would be a seller, a major seller of Las Vegas Sands (LVS - commentary - Cramer's Take) down here. ... NYSE Euronext (NYX - commentary - Cramer's Take) is trading as it if it's the end of the world. Incredible how that stock is so bad. What a shame. ... Verizon (VZ - commentary - Cramer's Take) has been one of the brightest stars here. I would wait until it retreats to buy more.

At the time of publication, Cramer had no positions in stocks mentioned.

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