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Insmed Incorporated Message Board

levonchiko 10 posts  |  Last Activity: Dec 3, 2014 11:17 AM Member since: Aug 30, 2000
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  • With that said, North Atlantic Drilling does still retain some growth potential, although this potential has weakened over the past few months. Much of this potential comes from the company's deal with Russian oil giant Rosneft (OTC:RNFTF), which I discussed in an earlier article. The fact that a sizable amount of North Atlantic Drilling's growth potential comes from Rosneft has led to some concerns among investors due to the continuation of the Western sanctions against Russia; these sanctions began earlier this year due to the events in the Ukraine. Further concerns about this deal come from the recently announced extension of the period in which each company can choose to cancel the deal. As I have discussed before, I believe that this deal will ultimately get done regardless of the current sanctions and that, as North Atlantic Drilling stated in its announcement, both companies remain committed to completing the deal. However, the recent plunge in global oil prices could make Rosneft hesitant to develop its tremendous resources in the Arctic regions to the north of Russia. This is due to the cost of extracting oil in these regions. In a presentation given at the Deutsche Bank Leveraged Finance Conference on October 3, North Atlantic Drilling's parent company Seadrill (NYSE:SDRL) detailed these costs:

    Sentiment: Strong Buy

  • he company has opted to temporarily suspend its dividend.
    One of the first things that an investor reading these highlights is likely to notice is that the company managed to achieve rather impressive quarter-over-quarter and year-over-year growth. The primary reason for this was the aforementioned increase in the company's economic utilization rate. As I have discussed many times in past articles, an offshore drilling rig is only compensated for time that the rig actually spends in operation. A rig does not generate revenue during those times that it experiences downtime, such as time spent undergoing maintenance or repairs. As North Atlantic Drilling has managed to increase its economic utilization rate during the third quarter compared to the second, the company's rigs experienced less downtime in aggregate than in the previous quarter. Thus, the company's fleet generated more revenue quarter-over-quarter. This increased revenue worked its way down to the company's bottom line, resulting in earnings growth. Unfortunately, North Atlantic Drilling is not likely to be able to increase its revenues and profits any further through this method going forward. This is because offshore drilling rigs are very sophisticated pieces of equipment and like any sophisticated piece of equipment, they require regular maintenance in order to continue functioning properly. Thus, it is highly unlikely that any rig will ever achieve 100% uptime over the course of a quarter and thus earn the full amount of revenue that it theoretically could given its contract. At a total fleetwide uptime of 99%, North Atlantic Drilling is unlikely to be able to increase its utilization further.

    Sentiment: Strong Buy

  • On Wednesday, November 26, 2014, harsh environment drilling specialist North Atlantic Drilling (NYSE:NADL) announced its third quarter 2014 financial results. Despite the way the market reacted to these results, the report was actually quite strong. In addition, the future prospects for the company continue to be strong. However, the recent decline in the price of oil could certainly prove negative for the company in the short-term should it persist. With that said, let us have a look at the company's results.

    As my long-term readers are no doubt already well aware, I like to share the highlights from a company's earnings report before delving into an analysis of those results. This is because these highlights provide an excellent background for the article and help to frame the resultant discussion. Therefore, here are the highlights from North Atlantic Drilling's third quarter results:

    The company reported total third quarter revenues of $356.2 million. This represents a 3.97% increase over the second quarter.
    North Atlantic Drilling reported an operating profit of $110.9 million in the third quarter. This represents an increase of 5.82% over the company's second quarter operating profit.
    North Atlantic Drilling achieved an excellent economic utilization rate of 99% in the third quarter, up slightly from the 98% rate that it achieved in the second quarter.
    The company had a net income of $74.4 million in the quarter. This works out to $0.29 per share and represents a 7.9% increase over the prior year quarter.
    North Atlantic Drilling reported an EBITDA of $167.9 million. This is the highest EBITDA that the company has ever achieved.

    Sentiment: Strong Buy

  • levonchiko levonchiko Dec 3, 2014 10:41 AM Flag

    Looks like the full report was just removed .
    Try to GOOGLE seeking Alpha's full article on NADL.
    They seem to be very bullish.

    Sentiment: Strong Buy

  • levonchiko by levonchiko Dec 3, 2014 10:31 AM Flag

    Source: North Atlantic Drilling

    As the chart shows, North Atlantic Drilling can effectively pay off all of its maturing debt over the next two years with the money saved by not paying out the dividend. This will significantly strengthen North Atlantic Drilling's balance sheet going forward, improving the company's ability to sustain itself until the deals with Rosneft begin to bear fruit. All in all, it was a very prudent move and it is not something that I believe should frighten investors away from the company.

    Editor's Note: This article discusses one or more securities that do not trade on a major exchange. Please be aware of the risks associated with these stocks.

    Sentiment: Strong Buy

  • Seeking Alpha
    Dec. 3, 2014 9:54 AM ET | About: North Atlantic Drilling Ltd. (NADL), Includes: RNFTF, SDRL
    Disclosure: The author is long NADL, SDRL. (More...)
    Summary

    North Atlantic Drilling's results showed strong quarter-over-quarter and year-over-year growth, including a record EBITDA.
    The company is well positioned for growth going forward due to the enormous amount of oil that is located off the coast of Siberia.
    Rosneft is committed to developing its Russian reserves and North Atlantic Drilling has the most modern and capable fleet to assist in this endeavor.
    The development timetable for these Russian reserves is somewhat uncertain.
    North Atlantic Drilling's dividend cut was not out of necessity but was done so the company could strengthen its finances and better weather near-term headwinds.
    This article was sent to 1,460 people who get email alerts on NADL.

    Sentiment: Strong Buy

  • Good luck to all.

    Sentiment: Strong Buy

  • Reply to

    Dividend timing?

    by biobug Nov 13, 2014 2:44 PM
    levonchiko levonchiko Nov 13, 2014 2:56 PM Flag

    Last time i received mine on Sept 18th that alone should give the stock a nice rebound at these high levels.
    I went thru this with PTEN energy years ago and ended up making a fortune with it. don't panic just hang in there.

  • Reply to

    Closed Green.....

    by insmhistorian Nov 6, 2014 4:01 PM
    levonchiko levonchiko Nov 6, 2014 4:13 PM Flag

    Yes it did specially for my last purchases from today.

    Sentiment: Strong Buy

  • levonchiko levonchiko Nov 6, 2014 2:25 PM Flag

    I just added 7000 shares and I think that share price will be heading back up soon.

    Sentiment: Strong Buy

INSM
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