Transocean (RIG) Down In Pre-Market Trading

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.

Trade-Ideas LLC identified Transocean ( RIG) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Transocean as such a stock due to the following factors:

  • RIG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $197.7 million.
  • RIG traded 138,400 shares today in the pre-market hours as of 7:28 AM.
  • RIG is down 2.1% today from yesterday's close.

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More details on RIG:

Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells worldwide. The company provides deepwater and harsh environment drilling, oil and gas drilling management, and drilling engineering and drilling project management services. The stock currently has a dividend yield of 7.3%. RIG has a PE ratio of 9.7. Currently there are 3 analysts that rate Transocean a buy, 3 analysts rate it a sell, and 15 rate it a hold.

The average volume for Transocean has been 4.4 million shares per day over the past 30 days. Transocean has a market cap of $14.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.10 and a short float of 14.5% with 11.50 days to cover. Shares are down 18.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Transocean as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • TRANSOCEAN LTD has improved earnings per share by 42.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TRANSOCEAN LTD increased its bottom line by earning $3.87 versus $2.24 in the prior year. This year, the market expects an improvement in earnings ($4.21 versus $3.87).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 42.0% when compared to the same quarter one year prior, rising from $321.00 million to $456.00 million.
  • RIG's revenue growth trails the industry average of 21.4%. Since the same quarter one year prior, revenues slightly increased by 7.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 45.75% is the gross profit margin for TRANSOCEAN LTD which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.49% is above that of the industry average.

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