I doubt you own any stock, since your ID smacks of a young SFB trader. A comfort for many INVESTORS is the 10% yield with the $20 B backlog. Go blow somewhere else.
Go back and read today's Seeking Alpha article on the market for high Spec Jack Ups showing no signs of a glut, worldwide utilizations above 90%.
While SDRL has $10 B in floating debt, a 150 bpts increase in rates can be easily handled. Projections call for cash flow from operations to increase by $1.4 B over next three years, while a 150 bpts increase in rates hits SDRL for $150 M.
Problem is market manipulation by option traders.
Also read the article Seeking Alpha just printed about rig demand. According to that article demand for deep water rigs is high and with Mexico growing, things bode well for SDRL.
As I first cut extrapolating from the expected increase in EBITDA, I get cash flow could increase by $1.4 B. Take out taxes and $150 M for higher rates and it still appears to me that, SDRL's future is bright.
Thank you for providing that.
If you READ my first post looking at the future growth in EBITDA and cash flow, I posted I ASSUMED most of the debt was fixed but for the purpose of the analysis I took it as floating.
However, unless interest rates sky rocket I think you agree with me that the debt concern is really a red herring. On the $10 B in debt described above a 150 bpts increase in rates costs the firm $150 M in extra interest expense versus a projected $1.4 BILLION increase in cash flow from operations expected from their 2016 EBITDA guidance of $4.5 B up from $2.65 B for this year.
Again, thanks for the rate info.
For those naive enough to believe traders can't manipulate stocks you are getting a classic example here, fueled by option players.
Once again, I ask the shorts to provide fundamental reasons to be taking this stock down 20% during the past five weeks.
You are getting a text book example here.
SDRL management should file a complaint with FINRA.
Yes that point has been made and its a valid one.
Despite yesterday's sell off check out the money flow starting around mid day after the stock hit its daily low. FYI it was indicating a net in flow of cash.
Please explain how that can happen when most of their debt is fixed and the expected increase in cash flow from operations over the next three years can more than cover a 800pts rise in rates WHICH ISNT GOING TO HAPPEN?
This is typical of a SFB short, throw up any BS and hope that it sticks.
Another classic sign of a predatory, collusional short scam
Still waiting for anyone to justify from a fundamental viewpoint why SDRL has dropped 20% since mid-November. Any ANALyst out there bashing the stock?
Technical charts show a bottom is forming here.
For your chartists out there go to ask research and compare SDRL money flow metric since mid November to the share price. Share price has dropped while money flow has not changed.
FYI-Another classic sign of a short scam. You can manipulate share price, but money flow is a lot harder.
Step up with a report about the irrational selling, or are you hoping to get some clients in cheap?
I won't do your job for you in the future.
BTW, your silence speaks volumes about your integrity and competence.
I agree, as I noted I believe most of SDRL debt is locked in.
I just used a worst case scenario, to make the shorts and the journalists who are shouting about debt look even more stupid.
Numerous signs now indicating this is nothing more than a totally contrived short scam. FYI, I have seen many of them during my tenure on the Street.
The good news is that the same dirt ball traders running it down now, will then run it back up. Expect selling pressure to ease up once the 12,000 DEC $45 put options play out by the end of this week.
Use that to your advantage!
As previously noted, another classic short scam is to heavily short the stock during slow lunch hour trading.
They did it yesterday too!
Since I know the moron shorts are incapable of doing any analysis, let's take a quick look at the potential impact of interest rate rises on SDRL.
Let's look at the future. SDRL's EBITDA is a running at an annualized rate of $2.65 B this year and cash flow from operations is projected around $2 B this year. The company projects an EBITDA of $4.5 B in 2016, which extrapolates to a cash flow from operations of around $3.4 B, or an increase of $1.4 B from this year.
Now, total debt stands at $12.7 B.
Q: How much would rates have to rise to consume half of the $1.4 B increase in 2016 cash flow?
A: Average Rates on SDRL's $12.7 B in debt would have to rise by 790 bpts to consume half of the increase in expected 2016 cash flow and that assumes all of SDRL's debt is floating, I assume most of SDRL's debt is not.
DOES ANY SHORT MORON REALLY BELIEVES THAT WILL HAPPEN?
FYI, most rate increase forecasts over the next two years are in the 1% to 1.5% range from the current 2.85% 10 year yield.
Now, does that $4.5 B in 2016 EBITDA make sense?
1. The Company has a $19.5 B backlog which is expected to grow, this gives investors good visibility.
2. Demand remains high with three out of the 21 rigs still under construction, having already entered into long-term contracts with customers prior to completion. This year, Seadrill has taken delivery and financed a total of 13 rigs and expects to take delivery of seven in 2014, 11 in 2015, and three in 2016. By the end of this four-year expansion, Seadrill would have roughly doubled the size of its fleet.
3. Mexico is opening up its Gulf Coast to development. This is the largest unexplored region in the world, aside from the North Pole.
Think about it Einstein!
Q: Why don't you provide us with an in depth discourse on SDRL' debt structure and its sensitivity to future rises in interest rates?
A; Because you are some SFB retail short who doesn't have a clue.
Just name calling, throwing out some arbitary numbers, false or wild accusations.
Where's the beef?
The trading scam continues!
I provided the date for the Forbes article where Luczo called out professional traders and Analysts for manipulating STX' share price. Go look it up on the Internet with the key words Luczo/ Forbes.
You might also pull up the price chart for STX after Luczo made his comments and the SEC began its investigation.