Saturday, 27 February 2016 00:00

Federal Debt And $1 Trillion In Debt Servicing

Point of Discussion – The United States Government is Potentially in an Inescapable Debt Trap Since the great financial crisis of 2008-09, the private sector and the household sector have deleverage (or moderately leveraged) while the government sector has leveraged significantly. To put things into perspective, the total Federal debt was $9.2 trillion at the beginning of 2008 and Federal…
Continuing with my analysis on offshore drilling stocks, I will focus on Transocean (NYSE: RIG), which has declined by 49% in the last one year. Based on the company’s order backlog and investment guidance for 2016 and 2017, this article provides the company’s liquidity analysis through 2017. The reason to focus on Transocean is the fact that the company has…
According to IMF World Economic Outlook for 2016, India’s GDP growth for 2016 and 2017 is likely to be 7.5%, overtaking China’s GDP growth outlook of 6.3% and 6.0% for 2016 and 2017 respectively. With India likely to be the fastest growing economy and with huge impending growth potential in the country, investors diversifying their portfolio globally should consider India.…
In the recent past, I have focused on the offshore drilling sector with analysis on some good stocks in the sector and analysis on stocks that can be avoided through 2016. While I don’t expect a liquidation scenario for any major offshore drilling company, it would be interesting to look at the loan-to-value metric for offshore drillers. The LTV will…
Thursday, 25 February 2016 00:00

Seadrill’s Cash Movement Analysis For 2016

Seadrill (NYSE: SDRL) today reported 4Q15 results and the company beat analyst estimates on the profitability front, driven by aggressive cost cutting. While I maintain a bearish outlook on Seadrill, I expect the stock to rally in the near-term from oversold levels. Seadrill has done well in 2015 from a deleveraging perspective and the company’s total debt in 4Q15 was…
Wednesday, 24 February 2016 00:00

Why I Remain Bearish On Atwood Oceanics

If offshore drilling industry conditions would have been robust, Atwood Oceanics (NYSE: ATW) would have been among my favourite stock picks considering the company’s high-specification fleet with an average age of just 4.5 years. However, in challenging times for the industry, a good company might not be a good investment and this article discusses the reasons to remain bearish on…
The depression in oil prices over the last 18+ months has translated into broad based carnage for the offshore drilling sector. The biggest names have not been spared and the outlook still remains challenging for the industry. However, there are quality names in the industry that are not significantly leveraged and have robust backlog to navigate the crisis. While I…
In the last six months the NIFTY index has declined by 19.0% and there are several factors that have contributed to the correction. This includes global economic weakness, currency volatility, increasing geo-political tensions and relatively weak growth in India. This article focuses on the corporate sector performance in India, which is impacted by local as well as global factors. The…
Monday, 22 February 2016 00:00

The Johan Sverdrup Cash Machine Analysis

The oil & gas industry has witnessed a major carnage in the last 18+ months and industry sentiments are significantly bearish. With prolonged depression in oil prices, there will be countries that enter into recession and companies that go bust. At the same time, there will be companies with sound fundamentals and game changing assets that are worth considering from…
The year 2015 was the strongest for crude tanker rates in the last seven years. One of the biggest factor that drove spot tankers rates higher was low oil prices. As countries looked to capitalize on low oil prices through storage of strategic crude reserves, the demand for oil tankers surged and so did the spot market rates. Clearly, the…