Transocean Ltd (RIG): Today's Featured Energy Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Transocean ( RIG) pushed the Energy industry lower today making it today's featured Energy laggard. The industry as a whole closed the day up 1%. By the end of trading, Transocean fell 55 cents (-1.2%) to $44.38 on average volume. Throughout the day, 3.2 million shares of Transocean exchanged hands as compared to its average daily volume of 3.7 million shares. The stock ranged in price between $43.65-$44.91 after having opened the day at $44.75 as compared to the previous trading day's close of $44.93. Other companies within the Energy industry that declined today were: Recon Technology ( RCON), down 29.4%, ZaZa Energy ( ZAZA), down 11.2%, Apco Oil and Gas International ( APAGF), down 10.3%, and GeoGlobal Resources ( GGR), down 9.5%.
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Transocean Ltd. provides offshore contract drilling services for oil and gas wells worldwide. It offers deepwater and harsh environment drilling, oil and gas drilling management, and drilling engineering and drilling project management services. Transocean has a market cap of $15.95 billion and is part of the basic materials sector. The company has a P/E ratio of -2.4, below the S&P 500 P/E ratio of 17.7. Shares are up 15.6% year to date as of the close of trading on Thursday. Currently there are 18 analysts that rate Transocean a buy, no analysts rate it a sell, and six rate it a hold.

TheStreet Ratings rates Transocean as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

On the positive front, HyperDynamics Corporation ( HDY), up 22%, BMB Munai ( BMBM), up 14%, MV Oil ( MVO), up 13.3%, and Recovery Energy ( RECV), up 12.8%, were all gainers within the energy industry with Spectra Energy ( SE) being today's featured energy industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the energy industry could consider Energy Select Sector SPDR ( XLE) while those bearish on the energy industry could consider Proshares Short Oil & Gas ( DDG).

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