Why Transocean is a poor investment choice…
If you open the newspapers lately, you will inevitably find stories about the perils of offshore drilling. No doubt, these stories formulate most investors views on the validity of drilling investments. That’s because most people are sheep. BAHHH.
Rather than look at the news, I want to know the facts. Is RIG a great business? Is it worth of my investment dollars… long term?
ROIC tells me everything I need to know.
Let’s take a look at the ROIC numbers for RIG:
Over the last 5 years, RIG has averaged just 12% ROIC. That is not good enough people. I need at least 20% ROIC, if not more.
In a world littered with poor and average companies, like RIG, I need to find better companies. ” Seek excellent companies”, as Buffett says.
RIG just doesn’t qualify.
Peace. JBFull disclosure: This blog and website are for informational, educational, and discussion purposes only. I am not a registered advisor, broker, dealer, or otherwise holding myself out to be a financial expert. In writing this Blog, I am only stating my opinion, which may change over time, as does the market and the conditions which affect it. I do not intend to cause harm of any kind by writing this Blog and do not guarantee the absolute accuracy of the contents within it. By writing this Blog, I do not offer advice of any kind as it relates to a potential course of action by readers involving the sale or purchase of stocks or any other security. I encourage you to consult with your financial advisor or other experts before making such decisions. Therefore, you, the reader, hereby agree not to hold JB’s Financial Blog, or any of its writers, liable for any action which you may choose to take or fail to take based strictly upon information contained within this Blog. I am in no way responsible for the comments which other readers may make, nor the content of websites found via outbound or inbound links to this site, as I have no control over the contents thereof. I look forward to your input and feedback. Peace. JB © 2010, JB’s Financial Blog. All rights reserved. Unauthorized use of JB’s Financial Blog’s material may violate multiple legal rights of JB’s Financial Blog. All of JB’s Financial Blog’s material and information provided herein is fully protected under the United States Copyright Laws, 17 U.S.C. §§ 101 et seq., and unauthorized copying of, or quoting from, our materials without express written permission is strictly prohibited. JB