Market Overview

The Contrarian Way To Play Crashing Oil Prices

Share:
The Contrarian Way To Play Crashing Oil Prices
Related ORIG
Mid-Afternoon Market Update: Dow Gains Over 50 Points; L Brands Shares Drop On Weak Forecast
Mid-Day Market Update: AXT Rises After Strong Q4 Results; Cyclacel Pharma Shares Tumble

Oil prices have fallen sharply over the past few weeks, dropping 13 percent since the Thanksgiving Day OPEC announcement of no production cuts.

Shares of oil-related stocks, however, have dropped even further in that time frame. Shares of Ocean Rig UDW Inc (NASDAQ: ORIG), an offshore drilling contractor, have lost more than 27 percent in the same period, falling from 13 to a new low of 9.45.

Ocean Rig has the fifth largest ultra-deep water fleet, fourth largest drill water, purest ultra-deep water and one of the youngest fleets in the deep water arena, according to the company website.

Other key highlights from the recent earnings presentation:

  • Achieved 98.6 percent average fleet wide operating performance for the third quarter
  • Awarded three-year contract extension by Petrobras for Ocean Rig Corcovado (Q2 2015 through Q2 2018)
  • Awarded three-year contract extension by Petrobras for Ocean Rig Mykonos (Q1 2015 through Q1 2018)
  • Declared dividend of $0.19 per share with respect to Q3 2014 operations, to shareholders on record as of October 31 and payable on November 11, 2014

Investors looking for a contrarian play in oil may want to consider stocks like Ocean Rig as a comparatively attractive way to position for a rebound in the price of oil.

Image credit: Ralf Roletschek, Flickr

Posted-In: OPEC ThanksgivingNews Commodities Top Stories Markets Trading Ideas Best of Benzinga

 

Related Articles (ORIG)

View Comments and Join the Discussion!