Today, shares of Transocean (NYSE:RIG) are on the move. Indeed, the 19% move we’ve seen in RIG stock at the time of writing is newsworthy in and of itself. These shares are moving on volume that’s approximately double the average today, as investors continue to pile into this trade.
Gasoline prices have continued to do well amid what appears to be a full-fledged bull market in commodities. Indeed, continued stimulus appears to be driving sentiment higher for pure-plays in the energy sector. Accordingly, companies like Transocean look to be a profitable trade for investors right now.
Indeed, any company that has doubled since the beginning of the year is worth investigating. Let’s dive into some of the reasons why investors are bullish on RIG stock right now.
Investors Bullish on RIG Stock, for Good Reason
- Transocean provides a range of ultra-deepwater and harsh-environment floaters for deep sea drilling.
- Additionally, the company recently moved into energy storage. In 2019, the company successfully “deployed the world’s first hybrid energy storage system aboard a floating unit, the Transocean Spitsbergen.”
- As mentioned, rising gasoline prices are “fueling” demand for producers like Transocean. A 6.4% month-over-month increase is nothing to sneeze at.
- These rising commodity prices have provided a boost to investors looking for value plays today. After posting lackluster full-year results, it appears investor optimism in the deep sea drilling segment is improving.
- Additionally, a growth to value rotation is spurring investors to consider underperforming RIG stock and other deep value plays today.
- Fundamentally, RIG stock appears to be ultra-cheap, trading at only 0.25 times its book value right now. Investors looking for economically sensitive stocks to rebound post-pandemic are surging toward such value stocks today.
- Furthermore, Transocean’s industry-leading backlog of $7.8 billion has enticed many investors to consider this stock right now.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.
