RIG stock price has traded above $20 since the 1990s, when oil was below $20 per barrel.
Are we going to see crude oil back below $20?
The future is somewhat hard to predict, but at current price of oil $50 per barrel, RIG is projected to earn $2.50 per share next year. RIG is oversold--IMHO.
Mutual Funds and Institutions bought RIG in recent months. Steve Newman, CEO bought 9800 shares in December 2014 at $20. Carl Ichan and Blackrock bought.
Short interest is 110M shares or 30% of the float (9 days to cover)--setting up for a short squeeze.
What would you pay for a stock with tangible value $40 per share, a 3.5% dividend, and earning profits of about $3 per year?
RIG seems oversold and undervalued. Oil exploration will continue, even at $50 oil. RIG is the leader in the industry, and the Swiss know how to manage money and investments.
$16 looks like a bottom. The low $14.50 was set in January.
When oil was $50 per barrel, RIG made money.
When oil was $100 per barrel, RIG made money.
RIG has $2.9B in cash. RIG has tangible equity of $40 per share.
RIG is selling at a huge discount to tangible value.
RIG is a Warren Buffet buy--IMHO.