A lot can happen in 5 to 10 years. Putting that much money in a few stocks is very risky. If things don't turn around by early 2018, NE faces a big debt problem. I really expect things to tun around in 2017. Many companies need $60+ to survive and oil consumption will continue to go up for the foreseeable future. That being said, thinbgs will get worse before they get better for off shore drillers.
It would be a buy only if you think day rates start going up and all of these stacked rigs get some work. NE has a nice backlog but contracts can be terminated and the price direction hinges on the expectations of future work. Right now, those expectations don't look promising
FCX just cancelled another drilling contract with Rowan on top of the 2 previously cancelled NE rigs. Off shore drilling is going to have tough sledding for some time and 52 week low will probably be revisited again
It sure sounds like it. Off shore drilling will not go away but NE,RIG,ESV, etc are not going to face an improved business climate until there is a shortage of rigs instead of a surplus. NE will lose money next year and I'm surprised that the share price does not decrease more
I just purchased Apple following their poor earning report. Mostly, I just own the S&P 500 index. It is hard to bear it over an extended period of time.
You may be correct but this old airborne guy still sees tough sledding for off shore oil drillers for at least another year
Concerns abound for the "E" in your note. If iPhone sales continue down without an increase from the Fall release of iPhone 7, earnings will go down further
No they don't and most public companies don't. You can go to the annual shareholders meeting in Wixom and ask Rob directly
Here is some of their analyst's report:
Nikkei Reports Weak 2H – Already Expected
■ Nikkei Reports Weak 2H – Already Expected. Today, Nikkei published an
article stating that 2H build plans for are likely to shrink to 70%-80% of the
level reached in the 2H15. The stock has reacted negatively to this news,
down about 3%, which we believe is an exaggeration as this was largely
understood and included in our estimates already. Given high retention, a
superior ecosystem, and a multi-product compute advantage, we believe
FCF of ~$67bn should be sustainable long term. We reiterate our Outperform
rating and $150 TP.
■ Builds down 20%-30% vs. 2H15 – already understood. We note that while
builds being down 20%-30% vs. 2H15 is disappointing, we believe this
should have already been understood and were already baked into our
estimates. Last year's builds in the 2H15 were 48mn and 75mn, with
approximately 10mn in overbuild, resulting in 133mn units. For 2H16, we are
currently forecasting ~109mn units, or down almost 20% vs. 2H15. So, while
the news is clearly disappointing, it was already largely included in our
iPhone unit estimates.
■ Installed base analysis points to recovery in 2017. While we see a
subdued iPhone cycle for the next few quarters driving our CY16 estimate of
202mn units (-12.9% yoy), we believe the iPhone business will recover to
227mn in CY17 given installed base growth, high retention rates and a
normalization in replacement rates. Specifically, we believe installed base
growth, which has grown 80% since 2013, should drive unit growth beginning
with the iPhone 7.
■ Valuation: Acknowledging near term weakness, we believe this reset
provides an opportunity and we see a trough valuation on a P/E ex cash
basis of 8.5x, suggesting support at $95. Long term, given Apple's Services
growth and an installed base that could grow to ~1.4bn long term, we see a
sustainable, annuity like FCF of $67bn LT, implying a valuation of $150