Today's Pre-Market Mover With Heavy Volume: Seadrill (SDRL)

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 Seadrill ( SDRL) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Seadrill as such a stock due to the following factors:

  • SDRL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $114.9 million.
  • SDRL traded 357,809 shares today in the pre-market hours as of 8:30 AM, representing 11.3% of its average daily volume.

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More details on SDRL:

Seadrill Limited, an offshore drilling contractor, provides offshore drilling services to the oil and gas industry worldwide. The company operates in three segments: Floaters, Jack-up Rigs, and Tender Rigs. The stock currently has a dividend yield of 10.9%. SDRL has a PE ratio of 6.7. Currently there are 3 analysts that rate Seadrill a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Seadrill has been 4.1 million shares per day over the past 30 days. Seadrill has a market cap of $17.2 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.42 and a short float of 7.6% with 8.97 days to cover. Shares are down 10.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Seadrill as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, notable return on equity, good cash flow from operations, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • 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 650.1% when compared to the same quarter one year prior, rising from $409.00 million to $3,068.00 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Energy Equipment & Services industry and the overall market, SEADRILL LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 55.08% to $656.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 27.47%.
  • The gross profit margin for SEADRILL LTD is rather high; currently it is at 57.08%. Regardless of SDRL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SDRL's net profit margin of 251.26% significantly outperformed against the industry.
  • SEADRILL LTD reported significant earnings per share improvement 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, SEADRILL LTD increased its bottom line by earning $5.47 versus $2.32 in the prior year. For the next year, the market is expecting a contraction of 44.2% in earnings ($3.05 versus $5.47).

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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