It seemed just a short while ago ( a week or so) that everyone was recommending
SDRL with a Price target in the Mid-50's and higher. Now Motley Fool comes out
with an article stateing that you should sell SDRL and many analysts have down-
graded the company. Is it possible that some well-connected people see the great
upside over the next few years and want to get in at a lower price. Perhaps I'm
just a Conspiracy Buff and should keep reading the National Enquirer. Or do people
actually manipulate stocks !
Other than Motley Fool, the ratings in recent months have been " Buy." My current holding of SDRL is based on the $19B backlog, earnings increases likely for q3 &4, for this year & next, a PEG = 0.48, industry leading day rates , utilization in the high 90s , a 15% annual growth past 5 years and a superb, sustainable dividend.
Manipulate stocks? Are you nuts. That would be illegal. Check out the LINE board this morning. They have been in negotiations to buy out BRY petroleum for months but an SEC inquiry stalled the deal. The drop dead date was last thursday but no news was released. On Friday, late in the day, all of a sudden BRY shares soared on NO NEWS. This morning LINN announced a much sweeter offer for BRY. It's IMPOSSIBLE for anyone to have known this was coming. It would have been illegal. LOL I'll ASSume you're fairly new to investing.
P.S. SDRL up about .35 in pre market. So much for downgrades.
Great summary! My only concern is the dividend pushing the envelope. If JF opts for prudence = just increase the dividend by no more than a penny per quarter in 2014 = 2015. As the cash flow increases, those funds above the dividend could be used for share buy-backs + other goodies for shareholders. If JF remains inflexible, SDRL will continue to be condemned as a lowly income stock. Restraint in cash payout could lead to an almost "unrestrained" [pun intended!] PER adjustment, creating billions of increases in SDRL' market valuation. But I'm not holding my breath.
Actually I've found that Motley Fool and Seeking Alpha are like the American Psychology Association. The PHD Psychologist for the Defense will find the Defendant not responsible and the PHD Psychologist for the Prosecution will find him fully responsible. It depends on wether the Writer wants the Stock to go up or down.