Transocean Ltd (RIG): Today's Featured Basic Materials Laggard

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Transocean ( RIG) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day up 0.8%. By the end of trading, Transocean fell $0.78 (-1.6%) to $47.53 on average volume. Throughout the day, 4,877,424 shares of Transocean exchanged hands as compared to its average daily volume of 6,134,400 shares. The stock ranged in price between $47.32-$48.35 after having opened the day at $48.27 as compared to the previous trading day's close of $48.31. Other companies within the Basic Materials sector that declined today were: Kosmos Energy ( KOS), down 8.0%, Forum Energy Technologies ( FET), down 5.7%, PostRock Energy ( PSTR), down 5.6% and USEC ( USU), down 4.9%.

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, as well as logistics services. Transocean has a market cap of $17.1 billion and is part of the energy industry. The company has a P/E ratio of 10.7, below the S&P 500 P/E ratio of 17.7. Shares are down 2.2% year to date as of the close of trading on Tuesday. Currently there are 6 analysts that rate Transocean a buy, 4 analysts rate it a sell, and 12 rate it a hold.

TheStreet Ratings rates Transocean as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the positive front, Synthesis Energy Sys ( SYMX), up 24.7%, China Gengsheng Minerals ( CHGS), up 21.6%, Quest Rare Minerals ( QRM), up 14.3% and Ivanhoe Energy ( IVAN), up 13.1% , were all gainers within the basic materials sector with Alcoa ( AA) being today's featured basic materials sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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