Transocean, Inc. (NYSE:RIG)

On sale for a fraction of its equipment value. Sure they ruined the Gulf, but is that any reason to discount their value?

Oil is not going away anytime soon and even with the moritorium these guys will be in demand. Keep in mind that this just means the rigs that were previously booked will now just be shipped over to Brasil or another coast. No big long term loss for them

Deep water is the last source of untapped oil. Transocean is the leader in accessing deep water oil. It is a technically risky business so RIG's expertise is a real moat. President Obama has to appear angry with offshore oil drillers because the US public is blaming him for not doing more. Ultimately none of the constraints regarding the security issues associated with foreign oil dependence have changed so demand for Transocean's services will pick up after a few bumps.

Should get away relatively easy on the oil spill and they are the industry leader. Better protected by insurance and less liability for these kinds of incidents in their contract wtih BP. Government seems to be focusing on BP and not so much RIG or HAL. Other oil players will pick up the rigs and RIG is also backlogged.

best deep water driller, getting hammered on BP exposure.

when oil eventually rises, so will RIG

Dominant in deep water drilling. Impact from recent Gulf leakage has been excessively weighted. Long-term growth will far exceed the market's.

I think this is the time to buy! These guys are on sale and I don't believe they will be affected by the fallout of the spill that much.

RIG has been the highest performer in the deep water drilling space for quite some time. This disaster has created a unique opportunity to buy their stock at a very attractive price.

Current 44.78, June 14 10. Limit 42

Good contracts
Not connectcted to BP
Stock price dropped dramitaclly

I am extending this pick from 1 year to 2-3 years. It has been beat down because of the oil spill in the Gulf, but the management at RIG has done a far better job handling the situation than that of BP. It may take awhile for this to be in the green, but gas prices will rise again and the gulf oil spill we someday be a memory. By 2011-2012 I think I'll make most of my losses back on this one.

I believe that existing deepwater rigs will require a backup relief well. No company is better positioned. They also have a $30 billion backlog.

Unlike BP they can move their rigs to other places in the world and make $$$. Hello Brazil.

The Gulf disaster was unforeseen. The short-term will be rocky but long-term this is a quality company with a valuable business.

A few birds got coated with oil. Let's pay ten times as much for oil so it won't happen again, at least not so close to home. We'll just it happen to some third world birds somewhere.

Value priced. Current oil spill will not have long term impact.

Sky is not falling and the world is not ending, we still need oil in almost every thing we do. Top of the line name falling of the cliff is an opportunity for us to buy at bargain price.

I am new to the Fool. So this is my first post. But, consider this a public service announcement. If you do not see the value here, you really should have someone else manage your money. In my opinion, the street has drastically undervalued the stock to a highly irrational degree. Here's the reasoning:

RIG's share price dropped from $90/sh immediately before the accident to a low of sub $50 (current P/E of under 6). Since there is a healthy backlog in this case, the P/E ratio is not a BS statistic. Add in the limited liability from the disaster and you have a bargain-priced monster. I think we'll see significant growth in price over the next 5 years. I wouldn't be surprised if the price doubled/tripled off the lows during that time. Due to the extreme price discount to book value, I'm skipping past further quantitative assessment. Why? Because this stock is priced as if the world is about to stop turning. It is currently trading at .75 book value/sh. Yes, I know that it is a PP&E intensive industry, However, I can't recall another instance in which I've seen a highly profitable company (23% PM in Q1, 26% for 2009; a recession year) with a deep backlog trading well below its book value.

Btw, the vast majority of their revenue stream is not in the GOM. According to the fleet status report (8-k filing), I count 13 deepwater rigs in the GOM. It does not classify which are considered to be in an "exploratory" status. My understanding is that established deepwater wells will not be impacted by the moratorium. Total assets operating in GOM accounting for about 25% of their total revenue stream. Thanks to "force majeure" clauses of varying degrees across the GOM customer contracts as well as other driling oportunities elsewhere, it looks like the revenue hit won't be that bad. Regardless, it will be temporary, 18 months or less. Due to national defense concerns related to our oil addiction, I will tell you that the moratorium lifespan will probably gravitate towards the nearer end of that timeframe.

Though the moratorium will probably have a near-term revenue impact, the revenue/financial loss of the Deepwater Horizon, the inevitable civil suits, and the politically-charged damage assessments will pale in comparison to the scale of the company's cash flows. Appropriately, BP will catch the vast majority of financial liabilities.

As a sweetener, RIG's management actually seems to work for the shareholders. This is a rarity in public companies. Over the past few years, they have succesfully purchased and integrated various acquistions, increased RE, declared dividends, paid down debt, and seem to be candid in their financials. It was rumored that they were also looking buy back stock before the disaster. I almost never say this, but I think RIG's executives are actually earning their paychecks.

To paraphrase the above, a modest percentage total operating assets may be suspended for 18 months or less which will probably result in some degree of revenue loss. Potential legal liability is insignificant relative to net income. Transocean is a superbly managed, highly profitable company that provides the means to collect a product that is increasingly in short supply and increasingly difficult to reach/extract. Barriers to entry for this industry are high due to immense capital requirements and PP&E development pipelines. The product itself does not carry brand recognition and business is won based on competitive pricing, but overall product supply is limited due to the long timeframe associated with PP&E development.

What else could you possibly need to know? I encourage you to verify the points that I have made above. I also encourage you to do so quickly before the big money floods the oil indices at the first sign of plugging the leak.

There are some that will point to the tepid oil demand outlook. Fine, oil is weak...today. If you're a day trader, look somewhere else. With a possible "W" looming out there, it may take a couple years to recover fully...but it will recover. If you are long, I don't see better deal right now. If you disagree, let me know why. I'm always trying to assess new info.

This stock has lost tremendous market cap - over $13B from its recent high of about $90/share. It will come roaring back when the gulf spill gets sorted out...