Just Ask Icahn: Transocean Undervalued and Cruising
NEW YORK (TheStreet) -- It wasn't that long ago that offshore drilling giant Transocean
Transocean also has dealt with several operational issues that impacted efficiencies, not least of which involve unplanned downtime eating into the company's profits. Still, Transocean shares, now trading around $54 per share, have gained 26% year to date, though not because investors are surfing Transocean waves of excitement.
Although the stock looks healthy against rivals such as Cameron International
Namely, activist investor Carl Icahn (who currently owns roughly 5.6% of the company) is bullish. Icahn has an estimated stake approaching $1 billion. I'm not suggesting that Icahn's involvement suddenly makes Transocean a better investment, just that he has not lost many bets.
With better-than-expected results already in hand from National Oilwell Varco and Cameron, it wasn't an issue of whether Transocean would beat estimates, but by how much? Counting third-quarter revenue climbing more than 5% year over year to $2.56 billion, Transocean didn't disappoint. Not only did Transocean beat revenue estimates by $90 million, but the growth in the quarter more-than doubled the performance of National Oilwell Varco, a stock the Street loves to no end.