A few things... 1. NE has some problems with a few rigs (downtime) 2. Revenue and earnings have come down for 2Q 3. Three spec drillships. 4. Five spec JUs 5. One trial due to start this quarter (maybe) 6. New CFO 7. New builds have been 3-5 months off schedule but... Storyline still active Earnings are increasing along with revenue (kicking and screaming). Contracts for newbuilds are coming in.
And... Technically speaking, NE is just at the rising bottom line on the one year chart. If it breaks 32, then?
ne has been a perenial disappointment, whether it be delayed new builds and downtime. ne appears to be heading toward $30 and below giving another opportunity for a trade near bv. the 5 new JU spec builds are a concern and they need to start at some point lining up lt contracts. the guy running the company is a trend follower. many leader cos like esv or rdc led the way on new builds and technology.
commodities, cyclicals getting slaughtered, slowdown being discounted. a number of these stocks trading at or near tang bv's. the better cos starting to catch up on downside with the lesser peers. will try to buy the better ones this time around. a round trip on this one probably heading under 30 again.
The down momentum is hard. I may look for 28 rather than 30 as an entry point. Risk reward is not favorable at 32-33. ESV not hit as hard but fell into the high 30's just late last year, so I am more fearful of buying other than for a quick trade.
To some extent, the drop in commodities may make a potential qe3 make these stocks fly later in the later year. That may make them worth the gamble.