Player Avatar TempoAllegro (30.25) Submitted: 6/14/2013 8:31:33 PM : Outperform Start Price: $49.26 RIG Score: -1.84

Transocean is an experienced, worldwide underwater oil driller still available at a discount. It has a large enough footprint in this industry to weather just about any storm, and deepwater drilling won’t get done without experienced operators like Transocean (RIG).

Of course someone investing in Transocean needs to be aware of the ongoing drag of potential liabilities for the Deepwater Horizon catastrophe, however, it can be safely assumed that Transocean would have been the last to want to see its rig sunk and its men killed. While the legal cases are ongoing, logically, one would think the owner of the field that pushed to stay on schedule, possibly at the risk of overlooking safety concerns – the same company that has already offered to pay the lion’s share of the cleanup costs – would bear most of the responsibility. Or the other company that did not properly seal the cement casing on the well that caused the blowout would be more liable. No matter how you slice it, Transocean did not want this to happen and more of the blame will likely fall on its partners. With this in mind, shares are artificially depressed, and will eventually bounce back.

If we were to keep down companies that had problems before like this, we would need to count out Exxon-Mobil, AIG, and JPM, among others with problems of one kind or another in their pasts. They have moved forward by acknowledging and learning from the mistakes, paying for any damages, and focusing on their core skills, which is what Transocean is doing.

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