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Noble Corporation plc Message Board

  • petermuyo petermuyo Dec 8, 2013 11:25 PM Flag

    Good long term investment?

    Hey everyone, I'm a long time lurker on this board and have appreciated the insights offered by several regular posters. I've held shares of NE for at least 4 years, adding to the position over the years but never selling shares (I'm not an active least anymore.. can be stressful and I prefer a long term approach).

    Over the last several years I find myself become disillusioned; the shares go up and come down, year after year. Even the best highs I've seen were years ago. I've made a measly 8% on my overall shares (not including dividends), whereas my more recent investment in MS has doubled just over 12 months and I have mutual funds that have shown incredible gains over 2 years.

    The performance is disheartening, but year after year I continue to hold, believing in the long term prospects of this company. The question now in my mind, would it be best to diversify and maybe do 50/50 in NE and RIG (which offers a great dividend and shows evidence of growth)? What I'm nervous about is that, now that NE is finally on the cusp of really improving earnings, they want to divest a portion of the company and leave me with shares of each! Am I the only person who would rather not risk it and just keep the company intact?

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    • Peter::::: Like you I am not a big fan of this " Reorg" I simply do not understand the reasoning or logic in this splitting the firm. Possibly someone else on the board ----Pis or Chute or Petro can detail Company's thoughts.
      I have posted that I believe the current malaise of stock price is "Streets" uncertainity as to the direction the Company wants to persue.

      • 2 Replies to woodfrog8
      • It does seem unusual to spin off part of a company. It's the opposite to a merger where duplicate costs are reduced.
        I'm pretty sure however there's a very good reason for this spin-off - in most driller company presentation (and in NEs) they talk abouot how so many rigs are 30 yrs and so on and how these will be obsolete soon. Well it seems NE has a disproportionate number of these old rigs compared to their immediate competition (check out RDC's latest presentation) so they better off-load them sooner rather than later.
        I think in fairness to NE mgt they squeezed as much out of rigs as they could - but deepwater horizon changed the business landscape with newer/safter etc. rigs a priority. NE found themselves in a bad situation and they quickly tried to build new rigs. So they've adapted but the final step is to get rid of those old rigs. It will be interesting to see if they can do it in time - SDRL said in their last Q call that the market for the older jack-ups is softening.

      • You can read the seeking alpha article that is currently 5 stories down on Yahoo's NE page. It also gives NE's statement on why they are doing it. My personal take is kind of neutral on it. NE management says it's so that NE and Spinoff Company can each focus on what they do best. have all kinds of public companies that have multiple divisions and they have a division head who focuses on his particular division. Say like GE which has tons of divisions that are completely unrelated. Anyway, it would remain to be seen just how much benefit is accrued by 2 separate companies. I don't think it's a negative though because contracts are still's not like they will loose any revenues....although they'll have associated costs to doing the spinoff. I don't know....just my quick take....there are people here who understand the company and industry much better than I do, I just don't see the spinoff really impacting the stock price if everything else is going well.

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