Top Diversified Bank Stocks To Own Right Now

Top Diversified Bank Stocks To Own Right Now: Diamond Offshore Drilling Inc. (DO)

Diamond Offshore Drilling, Inc. operates as an offshore oil and gas drilling contractor worldwide. It provides offshore drilling services in both the floater market, such as ultra-deepwater, deepwater, and mid-water; and in the non-floater and jack-up markets. The company operates a fleet of 44 offshore drilling rigs, consisting of 32 semisubmersibles, 7 jack-ups, and 5 dynamically positioned drillships, of which 4 are under construction. It serves independent oil and gas companies, and government-owned oil companies. The company was founded in 1989 and is headquartered in Houston, Texas. Diamond Offshore Drilling, Inc. is a subsidiary of Loews Corporation.

Advisors' Opinion:

• [By Ben Levisohn]

  Can you decide which is the bigger disaster? On the one hand, there’s the Other Woman, the new Cameron Diaz flick that’s most notable for a slow motion shot of her and a bikini-clad Kate Upton running. On the other, there’s the stock market which finished down this week after tumbles by Netflix (NFLX) and Intuitive Surgical (ISRG) outweighed big gains in Apple (AAPL), Micron Technology (MU) and Diamond Offshore (DO).

• [By Ben Levisohn]

  As Joan Rivers is fond of saying: Can we talk? About offshore drillers like Diamond Offshore (DO), I mean.

  Associated Press

  See, the offshore drillers have been reporting earnings results, and really, they haven’t been that bad. Diamond Offshore beat by 15 cents yesterday, Atwood Oceanics (ATW) beat by 12 cents this week, and in JanuaryNoble(NE) reported results in line with analyst forecasts.

  But those earnings represent the past, and investors are concerned that the amount these drillers can charge for the use of their platforms, known as dayrates, will plunge in 2014. And so have the offshore drillers. Diamond Offshore has dropped 20% this year, whileTransocean (RIG) has fallen 14%,Noble! has declined 17%,Seadrill(SDRL) has dropped 10% and Atwood Oceanics has fallen 14%.

  And the problem is that analysts believe the situation could get worse before it gets better. For instance, Global Hunter’s Brian Uhlmer slashed his rating on Diamond Offshore. He explains why:

  Our 2014 and 2015 EPS estimates drop 26% and 34%, respectively. On top of [Diamond Offshore's] newbuilds entering into service under difficult market conditions, we see lowered demand for deepwater capability and lowered dayrates. Consequently, operators are settling for shorter contracts. We believe 2014 will see further rig deactivations and declining dayrates for less capable units. We also expect the oversupply in this class to lead to more well-to-well work, which will likely lead to contract gaps and lower earnings quality. We believe that an 8x multiple on 2015E EPS is more than fair, with a resultant price target of $38 (down from $61 previously). With that much downside potential we are downgrading [Diamond Offshore] shares to a Sell Rating (from Neutral)…

  While this may be viewed as a late downgrade…we believe that the downside scenario of both rate and utilization degradation have not been factored into the share price

source from Top Penny Stocks For 2015:http://www.topstocksforum.com/top-diversified-bank-stocks-to-own-right-now.html