The UnRIGged Transocean: On Watch (as a Long)

I considered going long Transocean (“RIG”) in fall 2011, and did so (briefly) for a trade. It would not have been a bad investment had I stayed on. I am re-visiting RIG as a long through the end of the year, and may initiate a long (and update this post) at any time. Per @mmtul:

RIG the pig, below ’08 lows. Well done! For the past 20 years, P/B range = 0.7 to 4.1. Currently 0.77. What do you think, Carl [Icahn]?

I initiated a long earlier today, and (accidentally via ‘fat finger’) put on a position 10x larger than I had intended. I closed it (fortunately, not at a loss) to re-evaluate. I may start building a long position tomorrow.

A few things that interest me and are worthy of further examination:

  • Short interest is high – 12 days to cover, over 20% of float is short. Short interest is nearly 10x higher than 12 months ago.
  • Day rate trends, price of oil.
  • Russia
  • Secular/structural considerations
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: