Vantage Drilling Company (NYSEMKT:VTG)

CAPS Rating: 4 out of 5

Recs

0
Player Avatar rd80 (98.14) Submitted: 11/16/2012 10:49:30 PM : Outperform Start Price: $1.91 VTG Score: -81.73

Company is losing money. BUT...

A recent debt refinancing ( http://www.fool.com/investing/general/2012/10/22/last-week-in-bonds-2.aspx ) should save just about enough in interest make the company profitable going forward.

There's also a new drillship about to begin operations that will add to the top, and hopefully bottom, lines. One more drillship is on order and expected to be delivered in 2013.

Trailing PE is negative, but the forward PE based on analyst estimates is 9. It trades below book and a little over one times revenue.

I consider this a speculative pick.

As noted by the top pick check mark, I have a small long position and will consider adding more if the price is still down in the 1.60's next time I have some money to invest/gamble.

Member Avatar dorset96 (< 20) Submitted: 11/16/2012 11:04:12 PM
Recs: 1

VTG has been pretty volatile. I've been holding for a while, with shares picked up in the 1.40 and 1.20 range. I wouldn't quite call it speculative, though I agree it is pretty risky.

My thesis in purchasing it is that it was trading below book and had assembled assets that will be in tremendous demand going forward. I see it as a likely takeover candidate in the next few years.

Dorset

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