Noble Corp (NE)

Noble has a lot of things going for it, including a very strong balance sheet. With over 500 million in cash and only 180 million in debt coming due over the next five years, Noble clearly has the financial ability to maneuver through the difficult times ahead. Their flet utilization is still strong, and looking into the future, their deepwater rigs will be able to command a premium when oil prices return back to a normal range.

Keep perspective: NE is now $25 -- a 4-year low. Look what's happened during that time:

· Current assets per share are up 128% in that time;
· PEG is an astounding 0.25 (vs. S&P @ 0.99 and sector @ 0.42);
· Cash flow is not just positive, but very strong ($780 m net income last qtr);
· S&P rates it 5 stars (top rating) with a 12-mo target of $66;
· Reuters rates it "Outperform" -- also its top rating;
· Motley Fool gives NE its top (5-star) rating, with 98.8% of members expecting NE to outperform the market: and
· Current share price is 64% below S&P fair value calculation.

Cash on the sidelines will flow back into stocks like NE when oil prices recover and the market hits bottom. NE's stock price has been savaged, so institutions (hold 80%) probably have already sold and won't dump more shares on this "sellers only" market.

Dave

Get your hands off my chips! That's the mindset of management now. The new restructuring model has worked wonders and NOBLE is about to ride a tidal wave which lands smack dab on top of scrooge mcduck's money bin. Buy while its cheap.

analists target $97 in 12 month. Insider bought in June. Oil companies should continue ask for drilling services. Cash $260 million in june 06. revenues increasing at 40%. Very promising

Deepwater drillers have great earnings outlooks over the next few years.

CAPS is the screener for my investment newsletter.

The oil run can't last forever, but it probably has more room to go for a while.

Day rates continue to rise. Demand for oil will coninue to grow. Two years out I have EPS forecasted in the $14 - 16 range. Above average management and growth will drive above industry average multiple. Target share price is $140 in 2 years.

Another undervalued oil services company. As long as demand is high and the threat of oil supply reductions is present, all these companies are going to thrive.

Oil prices have prompted big oil companies to do more drilling, and to do more of it offshore. An offshore jack up rig costs $70 million, and there is a 4 year wait to get one. Demand is greater than supply and as old contracts for rigs expire drillers ilke Noble can renew them for double the day rates they contracted for a few years ago. Noble has the newest fleet of rigs, which means less down time and repair costs. The analysts who cover the company expect over a 25% sales increase next year, and for the company to grow 47% a year for the next five years. But the stock's PE is only 15, less than the growth rate, and the PEG ratio os only .17, indicating the stock price has lots of room to grow as the company does, and that's without factoring in the merger and acquisition rumors.

World demand for oil is growing, particularly as China and India increase demand.
Exploration and drilling will be in gretaer and greater demand
This oil driller is well run and very profitable

Noble Corporation is primarily involved in the business of providing offshore contract drilling services for oil and natural gas exploration world over. Its fleet consists of 13 semisubmersibles, three dynamically positioned drillships, 44 jackups and three submersibles with average rig utilization of 96% in 2006. Approximately 86% of the fleet is deployed in international markets that including Middle East, India, and Mexico. Though company’s core operations being contract drilling and labor services provide most of the revenues, Sasol is slowly expanding in non-drilling areas, by offering Engineering, consulting and other allied services.

The drilling industry is deeply impacted by oil and gas prices, as high prices induce oil players to drill more wells. Moreover, the industry also faces tough competition, where contracts are awarded to the lowest bidder, thus creating additional pricing pressures. However, the current massive demand of rigs and its limited supply in the short term scenario is making the day prices of drilling to shoot up. The future of the industry also looks bright as crude and oil prices are expected to remain at higher levels, backed by higher household demand for heating and increased industrial usage.

Noble faced a strong 2006 with revenues rising 52% as a result of increase in contracts from international sources and good performance of labor contract drilling services. While profits more than doubled, guided by increase in day rates by about 100%, the company is adopting cost-cutting measures to boost the profits.

Looking ahead in 2007, drilling rates will continue to remain strong due to anticipated positive price outlook of oil and fuel and continued limited supply of rigs. Adding to it, as less than 20% of Noble’s contract days are committed, the company can take advantage of these high prices with the rest, accordingly giving a stronger performance. Further, considering company’s continued focus on building new rigs, its number of long term contracts that are signed at exorbitant rates and with current ADR price looking modestly priced, Noble could prove to be a strong investment in 2007.

Oil drillers are still incredibly cheap, and as the price of oil increases (or plateaus) and oil becomes harder and harder to find, drillers will profit immensely as companies and nations scramble to extract more oil. The best three plays in this sector are NE, ESV, and RIG.

I am bullish on all offshore drillers. Rising oil prices gives the major oil companies incentives to find new sources of oil. Most of these untapped sources are coming via deep sea drillers such as Noble. Even though this trend doesn't seem to change anytime soon, they are still trading as if the answer to running cars off of corn was right around the corner. Day rates for most of it's drills are rising. It has a PEG ratio of .27 compared to an already low industry average of 1.06. It recently pulled back below 100, but i would still be buying even if it was at 120.

This popped up in a screen for companies with over 200 all-star outperforms and 5 or less all-star underperforms. This is a very solid contract-drilling company that has been beaten down a lot recently. Earnings have remained strong even as oil declined. I expect a rally in the next few months, especially when oil prices starts increasing again.

I can get this thing under $50 again?! God bless you, Mr. Market.

S&P500 company. Fundamentals very similar to those of Ensco International. Noble Drilling Corporation has a fleet of 63 offshore drilling units. Between Noble and Ensco I definitely prefer the latter, but both are good plays in a good sector.

I don't like the fact that this company is based on the Cayman Islands, but I have no moral issues rating this stock to outperform the S&P500.

For the same reasons as I'm recommending for Diamond Offshore and Rowan Companies, I expect Noble to reach new heights with its stock price, but the ride may be a little more choppy.
SOURCEs: SmartMoney, April 2007, p. 75; and Yahoo Finance.

Noble (NE) and Transocean (RIG) are the crown jewels of the deepwater drilling world, which energy experts expect to experience continued rapid growth through the end of the decade. Because of their long term contracts and substantial order backlogs, both companies are unlikely to be affected by month to month fluctions in energy prices.

Since the era of easy-to-find, cheap oil & gas is over, the future looks bright for deepwater drillers with limited competition, like NE & RIG. Noble is trading today at 6.3 x estimated 08 earnings. Its 5-year earnings growth is projected at 40%/yr, and its 07 PEG is just over .2! This represents a remarkable buying opportunity.

While prospects for many shallow water and onshore oil service firms may rise and fall over the short term with the unpredictable turns of North American natural gas prices, the deep water drillers enjoy considerable insulation from such concerns.

I continue to feel that the supply of oil is misunderstood. We don't have enough, and other countries (India, China) are entering growth stages where we were twenty years ago. They're going to need even more energy.

For long term investors, go heavy on oil stocks...drillers, suppliers, etc. In 10 years the supply picture will be very frightening indeed. Furthermore, alternative energy sources are not yet focused enough or available enough to curb the coming crisis. We might as well profit from it.