SeaDrill Shares Go From Ugly Duckling to Swan as Oil Stabilizes

NEW YORK (The Street) -- Shares of energy companies have been punished because of plummeting prices of WTI crude oil. Currently trading at about $57.90 a barrel, the commodity has had a wild ride this year after plunging from $100 a barrel about a year ago. And offshore drilling contractor SeaDrill (SDRL) , which provides production services to the oil and gas industry, has been among the hardest-hit stocks. But not anymore.

The recovery in SeaDrill stock, which has skyrocketed roughly 50% since April, has been swift. SeaDrill stock has recovered all of its 2015 losses and then some, up roughly 12% year to date, and besting gains of 1.3% for the broader Energy Select Sector SPDR Fund (XLE) -- which includes some prominent names like Kinder Morgan (KMI) (up 1%) and EOG Resources (EOG) (down 2%).

Why has SeaDrill stock done so well? SeaDrill's exposure to oil, which has begun to rebound, has made investors feel more confident that the worst is over.

Despite recent gains in SeaDrill stock, however, investors that have held these shares over the past year are still down more than 60% on their position.

It's encouraging to new investors that sentiment about SeaDrill  -- once an ugly duckling -- has begun to change. Ahead of the company's first-quarter earnings results Thursday, investors are betting the stock can become a swan in the second half of 2015, as evidenced by the amount of money that has poured into the stock since April, making it look like a worthwhile bet.

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