love this board. Saul you are brilliant!
I’m currently long Skx lgih and Pn.
Wanted to see if anyone here likes ATW as a turnaround play on oil angled gas. It’s a current stock advisor pick and David Gardner owns it.
It was in the 50 plus a share range a few years ago. Now 9 something.
P/e is 1.5
The risk is that some of their contracts will come offline this year. They will need to get new ones. But if they did come out of this downturn intact they could potentially get back to their all time high. Insiders have been purchasing shares for awhile now.
Does this tickle anyone’s imagination?
Whether anyone would invests in these deep water drillers right now would depend greatly on if they feel deep water drilling will be a competitive source of oil going forward.
I personally have my doubts whether there will be enough oil demand in the long term future to make these companies appealing investments unless they can bring down costs considerably. Sure emerging market oil usage is growing quickly. Though cleaner oil replacements are also gaining popularity quite quickly. Both electric cars and natural gas for transportation are both gaining traction not only here but around the world. Given how deep water is one of the most expensive sources of oil I just feel there is just too much risk in any of these names for an investment. Given the current oil market there does seem to be a lot of other opportunities to make great returns without quite as much risk.
Long story short there is just too much risk in these deep water drillers to interest me at the moment. If you or anyone else choose to invest though I do wish you the best of luck.
Soth
4 Likes
Thanks for writing in Soth. Yes there will be pressure on day rates and I agree that it remains to be seen if demand will return for offshore drilling with historic day rate prices.
I got into ATW for a bit and got out. Technically it looks good right now as it is above its 50dma but a lot of headwinds and unknowns.
Heck even Saudi Arabia is talking about going green. They think in 50 years they may not be selling oil anymore.
1 Like