Opinion on  Transocean Inc (RIG)     Sector: Energy  >  Industry: Oil Well Services & Equipment
Transocean Inc.

Transocean Inc. is the world's largest offshore drilling contractor and the leading provider of drilling management services worldwide.

The company specializes in deepwater drilling. It's not afraid of getting its feet wet with operations in the world's major offshore oil-producing regions, including Africa, Asia, Brazil, Canada, India, the Middle East, the Gulf of Mexico and the North Sea. Transocean has a fleet of 82 mobile offshore drilling units, inland barges and support vessels, including semi-submersibles and drill ships, jackup rigs and other rigs. As the premier deep-water driller in the world, the company has a massive order backlog and is still charging very high day rates.

The company recently reported net income for the fourth quarter at $1,056 million, or $4.17 per diluted share. The results compare to net income of $621 million, or $2.92 per diluted share for the same period in 2006.

By merging with GlobalSantaFe, Transocean has transformed and now has a larger global footprint and more extensive technical capabilities.

Transocean
Transocean, Inc. certainly has the right ticker symbol for this sector, RIG. Transocean provides offshore contract drilling services, providing drilling rigs, related equipment, and work crews primarily on a day rate basis. The company owns and operates approximately 82 mobile offshore and barge drilling units. Transocean has fluctuated quite a bit this year, starting the year at $145 per share, falling to $122, rising to $161, and recently closing back to about where it started. Fortunately, stock options are available on RIG and a covered call investing  position with August expiration is available for RIG with a potential return of 4%. The potential return for the RIG covered call position could be realized in 25 days. Additionally, the covered call position for RIG has 4.7% downside protection, so as long as the stock price of RIG does not drop more than 4.7% at expiration, the position will be profitable.