Rowan Companies, Inc. (NYSE:RDC)

priced under tangible book value, decent growth prospects

"When trade times are measured in microseconds, but business value is generated over years, there's a very real potential for a huge gap to open between a stock's price and a company's value. It's by looking for and exploiting those gaps -- and then waiting for the short-sighted computers to catch up with the long term reality -- that you have an edge over today's high tech traders.

One straightforward way to find such opportunities is to look for profitable companies that the market has discarded as being worth more dead than alive..."

(Excerpt from a draft CAPScall article with estimated publication date of 29-DEC-2011)

value screen

RDC has been pretty much flat in the past few months, puttering around between 40 and 36. If the stock can break-out above the resistance at 40 and stay there a couple days, I think that's a good rally signal and a time to start a position in RDC. However, if the stock falls below the support at 36, the next line of support doesn't come until 33, so that would be a definite signal to give RDC a thumbs down, until it can put together another rally past 40. RDC is a good company, has a lot of potential and is a thumbs-up in the long term. However, getting in at the right spot can make you an extra 3-5% and depending on the size of your position, that can be a good chunk of change in your pocket!

FPA Capital Fund is holding more than 30% in cash, just as what he did before the 2001-2002 internet bubble and 2008-2009 financial crisis. Such a macro fundamental driven market call has served the fund well. Fund manager Robert Rodriguez continues to favor energy stocks as he believes that the world is running out of oil and gas reserves. In this sector, he likes oil & gas drilling stocks. This is Rodriguez's top holding.

Positive Stock for the next few years

Throwing darts at this point!!!

Great Value, profitable and good business to be in.

Good fundamentals, mixed analyst opinion.

Rowan is a deep water oil driler . Low debt . Good balance sheet. One of the most beat up stock on the market. The oil sector is going to grow bigger in 5 to 100 year! The intrinsic value of this stock is 68.57 using disocunt cash flow. The margin of saftey margin of saftey is aroound 71 percent. Sell in five years at the intristic value or sooner make 36 % or more compound a year. No brainer !

Besides being a contract driller, Rowan manufactures equipment. The latter pushed me into its arms as an invester. It has the advantage of manufacturing for three industries that are going to need its products... desperately. Drilling rigs, mining equipment and timber harvesters. I call that a sweet spot. Bring it!

Contract drilling services will only increase as oil demand picks back up world wide and Rowan has good margins and competent management to take advantage of further opportunities in the sector.

Is WallStreet full of it or are these really some of the Fastest-Growing Stocks in S&P 500 Index

I am betting on oil/energy right now.

http://seekingalpha.com/article/132892-interview-with-matt-badiali-time-to-buy-oil-service-companies

march,2009

Earnings little affected by drop in oil prices, which should position them well when the industry turns around again. 3% yield also a plus.

May be foolish questions

1. How will $50 oil (in a year) impact its future growth potential?

2. Considering the highly capital intensive industry, with credit tightening and cost of credit going up, wont it hit its earnings?

I like the growth and fundamentals, and current valuation, but how much upside does this stock really have...? (answers welcomed)