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Invest in Transocean, Easy as 1-2-3

July 01, 2011 – Comments (2) | RELATED TICKERS: RIG , OIL

Transocean is a company we try to follow as much a possible. And right now, they are looking pretty good when it comes to investment possibilities. Invest in oil? Interested in offshore drilling? Check and Check. Need three reasons to invest? They have that too! Follow My Alpha has compiled three reasons why Transocean is a good investment.

 "1. Leader of the Pack

When it comes to deep sea drilling RIG is still the industry leader. The expertise, experience, and breakthrough technologies it develops cannot be easily replicated or substituted by anyone else. Further, the firm has the largest fleet – meaning that it has more individual pricing power over the whole market than any other firm. It doesn’t sound fair to whoever needs the services but that’s why we love the situation. We aren’t looking for companies that play fair; we’re looking for companies that generate top dollar.

2. Strong Financials and Arbitrage Opportunities

Yes, there is still the slight possibility that RIG could somehow become partially liable for the incident in the Gulf of Mexico. No one will know for sure until the end of July when the U.S. Coast Guard/Interior Department panel releases its report. Regardless, after reviewing the internal report from Transocean it looks like the firm should be in the clear even though the report could obviously be biased toward the firm."