JBL: Ahead of the Curve

Transocean holds 19 of the past 23 world records for drilling in deep water, including the current world water-depth drilling of 10,011 feet in the Gulf of Mexico. If there is oil out there, Transocean can get to it.

Transocean is the first to be able to drill in the Barents Sea and in the deepest water of the Shetland Islands. Transocean has shown the ability to adapt to any type of drilling that is needed to bring oil to the surface.

Capacity is still limited which means Transocean has pricing power on day rates for their rigs; 14 of the company's rigs will come off of contract by the end of 2007. These rigs will be priced at higher rates. Transocean has everything going in its favor.

Transocean has authorized a $2 billion dollar stock buyback, which is around 10% of market cap. Additionally, a forward multiple of around 15 and a growth rate over that makes this a good stock to own.

Alternative Energy

A few weeks ago I made the case for Deere (DE Quote) based on the emergence of ethanol as an alternative energy source. Since then, Deere has announced a share buyback program of over 10% of current outstanding stock and a 26% dividend increase. Deere is up about 10% since I recommended it and is still a good buy at these levels.