"ENSCO International Finalizes New Ultra-Deepwater Semisubmersible Rig Construction Contract"
biz.yahoo.com
Now whereas this has been reported elsewhere on SI, it's in the context of being implicitly good for the construction company (KPELY) who will build this rig. KPELY followers being very pleased. (And I'm one and I am.)
I have an additional follow-through view though. My opinion: Here we have ESV, a company so sure of its oil business prospects and the profits that it might make, that it is willing to commit more than $500M now for something to be delivered in 2011. (Or very sure of their ability to sell the construction contract or the rig before it's delivered.) I take this purchase commitment as a very positive sign and a good if not gutsy proactive bet by ESV management. (Perhaps though, not everybody agrees, as there's been some insider sells at current price.)
According to Yahoo, ESV shows very good profit margins, good returns on equity, a p/e multiple under 10, and more cash than long-term debt. On the one hand, apparently ESV is in a very cyclical business; OTOH, ESV's been profitable in each of the past ten years.
I'm a holder of ESV, and although the stock now is up close to all-time highs, I'm adding a little more to my position now.
Jmo, and I've been wrong many, many times. |
