Rig Stock – Transocean Ltd. (NYSE:RIG) Reports Q1 Loss, Tops Revenue Estimates
Shares of Transocean Ltd. (NYSE:RIG) reached at $4.00 price level during last trade its distance from 20 days simple moving average was 20.32%, and its distance from 50 days simple moving average was 11.10% while it has a distance of 71.18% from the 200 days simple moving average. Transocean (RIG) came out with a quarterly loss of $0.19 per share versus the Zacks Consensus Estimate of a loss of $0.16. This compares to loss of $0.30 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -18.75%. A quarter ago, it was expected that this offshore oil and gas drilling contractor would post a loss of $0.16 per share when it actually produced a loss of $0.34, delivering a surprise of -112.50%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Transocean, which belongs to the Zacks Oil and Gas – Drilling industry, posted revenues of $653 million for the quarter ended March 2021, surpassing the Zacks Consensus Estimate by 2.18%. This compares to year-ago revenues of $759 million. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock’s immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.
Transocean shares have added about 46.3% since the beginning of the year versus the S&P 500’s gain of 12.1%.
What’s Next for Transocean?
While Transocean has outperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company’s earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Past 5 years growth of RIG observed at -19.10%, and for the next five years the analysts that follow this company are expecting its growth at 4.80%. The average true range (ATR) is a measure of volatility introduced by Welles Wilder in his book, “New Concepts in Technical Trading Systems.” The true range indicator is the greatest of the following: current high less the current low, the absolute value of the current high less the previous close and the absolute value of the current low less the previous close. The average true range is a moving average, generally 14 days, of the true ranges.
The stock has a market cap of $2.22B with 617.00M shares outstanding, of which the float was 579.75M shares. Analysts consider this stock active, since it switched Trading volume reached 32,540,011 shares as compared to its average volume of 21.27M shares. The Average Daily Trading Volume (ADTV) demonstrates trading activity related to the liquidity of the security. When Ave Volume tends to increase, it shows enhanced liquidity.
But when Ave Volume is lower, the security will tend to be cheap as people are not as keen to purchase it. Hence, it might have an effect on the worth of the security. RIG’s relative volume was 1.53. Relative volume is a great indicator to keep a close eye on, but like most indicators it works best in conjunction with other indicators and on different time frames. Higher relative volume you will have more liquidity in the stock which will tighten spreads and allow you to trade with more size without a ton of slippage.
Important Technical Indicators Analysis Report and Volatility Measures:
Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which calculates the predictable return of an asset based on its beta and predictable market returns. Beta is also known as the beta coefficient.
A beta of 1 indicates that the security’s price moves with the market. A beta of less than 1 means that the security is theoretically less volatile than the market. A beta of greater than 1 indicates that the security’s price is theoretically more volatile than the market. After a recent check, beta value for this stock comes out to be 3.63. A statistical measure of the dispersion of returns (volatility) for RIG producing salvation in Investors mouth, it has week volatility of 8.61% and for the month booked as 7.22%. Regardless of which metric you utilize, a firm understanding of the concept of volatility and how it is measured is essential to successful investing. A stock that maintains a relatively stable price has low volatility. When investing in a volatile security, the risk of success is increased just as much as the risk of failure.
The volatility value is used by the investors for various reasons and purposes in measuring the fundamental price change and the rate of variation in RIG’s price. The ART is a specific type of indicator, which is capable of weighing up stock volatility in the financial markets effectively.
Transocean Ltd. has an average true range (ATR) of 0.24. Other technical indicators are worth considering in assessing the prospects for EQT. RIG’s price to sales ratio for trailing twelve months was 0.73 and price to book ratio for most recent quarter was 0.22, whereas price to cash per share for the most recent quarter was 2.08. The Company’s price to free cash flow for trailing twelve months was 6.82. Its quick ratio for most recent quarter was 1.60. Analysts mean recommendation for the stock was 3.60. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.
Should You Go With High Insider Ownership?
Many value investors look for stocks with a high percent of insider ownership, under the theory that when management are shareholders, they will act in its own self interest, and create shareholder value in the long-term. This aligns the interests of shareholders with management, thus benefiting everyone. While this sounds great in theory, high insider ownership can actually lead to the opposite result, a management team that is unaccountable because they can keep their jobs under almost any circumstance.
Transocean Ltd.‘s shares owned by insiders remained 0.40%, whereas shares owned by institutional owners are 50.30%.
Where Do Relative Strength Index (RSI) Stands?
Perhaps, it is one of the most important indicators, because it is used in the technical analysis of the stock in the money market. The relative strength index (RSI) is claimed to depict the latest and past performances of the stock market, based upon the ending price volumes of the current trading period. The RSI is characterized as a momentum oscillator, evaluating the speed and scale of directional price shifts. The momentum exemplifies both rising and falling rates of the price in the stock market. Using RSI, you can calculate momentum as the percentage of elevated closes to reduced closes. But if the stocks have experienced optimistic changes rapidly, then it might have an increased RSI than stocks. So, it might cause negative changes in the market.
The RSI index is largely used by traders on a 14-day time period and is evaluated on a range from 0 to 100, along with both high and low volumes marked at 70 and 30, correspondingly. Both the shorter and longer timeframes are used by the traders for shorter and longer purposes. It further adds high and low ranges like from 80 to 20 and from 90 to 10. This trend takes place less repeatedly.
However, it represents stronger momentum in the market. In the meantime, the Accenture plc’s 14-day RSI was settled at 66.35. All in all, the trends of the stock market were shifting slowly but surely.
Meanwhile, RIG traded under umbrella of Energy sector, the stock was traded -16.84% ahead of its 52-week high and 515.38% beyond its 52-week low. So, both the price and 52-week high indicators would give you a clear-cut picture to evaluate the price direction.
Rig Stock – Transocean Ltd. (NYSE:RIG) Reports Q1 Loss, Tops Revenue Estimates]
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