SDRL fairly value: Take some profit & run in May
Seadrill's debt/equity ratio is extremely alarming and will become worse as it gives up a fundamental amount of its assets to SapuraKencana.
You said this gives up a fundamental amt of assets to SPA ( You didn't mention it was for $753 Million). Cha Ching!
JF said: This transaction will free up significant financial flexibility for Seadrill, and the proceeds will as previously stated be used over time to continue to aggressively grow our modern ultra-deepwater and jack-up exposure.
I trust his judgement just a tad more than yours.
I thought that SA article was fair. SDRL is using a ton of leverage in hopes of a big payday down the road. I am speculating that they will succeed and so far I have made good money off them through distributions, I sold out at 41 and bought back in the $36s and I sold put options. People might want to look at the 2015 38 puts. I sold those in the mid $9 range. They still look nice at their current price. Worse case you are forced to net buy this stock at $30. Odds are stock is trading in the 40s by then.
Sentiment: Strong Buy
"SDRL is using a ton of leverage in hopes of a big payday down the road."
You sound like you've done about ten seconds of research into SDRL. Are you even aware of the backlog on the contracts? HOPES of a big payday? Man, they have solid CONTRACTS for that big payday in hand.
Why does Yahoo keep giving room/time for this 'loud-mouth"? That,
PLUS oozing with superficiality/slapdash dash dash.. We can opt to put the ignore prompt in action?
Sentiment: Strong Buy
Sad to see such uninformed comment:
1. Debt = actually CREDIT given to SDRL = is less than half the confirmed backlog;
2. Tender rigs produce a LOWER % return on invested cap = switching investments into higher yielding
assets is a smart move.
Sentiment: Strong Buy
douglassgraem: I agree entirely with your post - (detest unsupported comments). And although technicals are usually looked upon with disdain by many posters, they do have some merit to PAST stock performance...Here is some additional data that may be useful: a) previous resistance level of 36.16 was broken and held, as previously noted, but more importantly, b) the next resistance level of 36.74 was also broken today, which was NOT anticipated, and closed @ 37.08... If SDRL holds above the 36.74 trend-line, the next level of resistance should occur around c) the 37.80+/- level... (numbers based on previous RSI's)...The current move was not typical, with above-average volume occurring today, so a slight to moderate pullback could be expected, but the trajectory appears constant...A mixture of fundamentals, combined with technicals, and current trend-lines are potentially a good indicator of where the stock may be headed - (note however, a major across the board market pull-back cannot be discounted)...
Let's put your statement for review: Today SDRL has exceeded the 5 day, the 50 day and the 200 day SMA and you want to sell the stock in May - Today is April 24th and therefore premature at best; aside from that, it not only broke through resistance at 26.16 but has held and moved further upward to above 37.00/p/s plus a 1st quarter dividend to be announced in May, payable in June and you want to sell it in May after it rebounded from a 34+/- low -- Please show me your basis for that accessment...
Go away - If you want a really bad deby to equity ratio look at RIG... Same old argument over and over again... Please try something new in the attempt to downgrade this stock - numbers? trendlines? techicals? charts?existing contracts? dayrates? dividend? -- Back up the assertion with something viable...
Nice try cramer !!!!
but !!!! " SDRL Seeking Alpha - also said
"Seadrill, on the other hand, has been making headway for a sustained future, as many of its new rigs have already been contracted out. Using money from the sale of tender rigs, the company can grow exponentially in the next two years. Furthermore, the expectation of a dividend clearly makes it an investor favorite. In my opinion, Seadrill has a lot of potential for the coming year and keeping in mind the news and financials analyzed in this article, I am providing a buy rating for it."