5-Star Stocks Poised to Pop: Transocean

Based on the aggregated intelligence of 110,000 investors participating in Motley Fool CAPS, the Fool's free investing community, offshore drilling contractor Transocean (NYSE: RIG  ) has earned a coveted five-star ranking. Our data has shown that five-star stocks outperform the market by a significant margin; conversely, one-star stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Transocean's business, and see what CAPS investors are saying about the stock right now.

Transocean facts

Headquarters (Founded)

Houston, Texas (1953)

Market Cap

$45.96 billion

Industry

Oil and gas drilling

TTM Revenue

$8.16 billion

Management

CEO Robert Long (since Oct. 2006); COO Steven Newman (since May 2008)

Return on Equity (avg. last three years)

23.4%

CAPS members bullish on RIG also bullish on

Vale (NYSE: RIO  )
Freeport-McMoRan Copper & Gold (NYSE: FCX  )
Chesapeake Energy (NYSE: CHK  )

CAPS members bearish on RIG also bearish on

First Solar (Nasdaq: FSLR  )
Diamond Offshore Drilling (NYSE: DO  )
United States Oil (AMEX: USO  )

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 1,612 out of the 1,636 members who have rated Transocean -- some 98% -- believe the stock will outperform the S&P 500 going forward. These All-Star bulls include osakehai and TMFDeej, both of whom are ranked in the top 10% of our community.

In February, osakehai argued that Transocean is the:

Best of the best in offshore drilling services. Deepwater drilling is booming and this company has the best ships and subs. Backlog is very strong for several years and profits are rising.

A more recent (and much longer) pitch by TMFDeej in April expanded on that bullish line of thinking. Here's an excerpt:

When one talks about deepwater drillers, they have to start with Transocean ... Overall the positives for this company far outweigh the negatives. During the 1970s, the last time that the price of oil rose as rapidly as it is doing today, drillers were among the best performing categories of stocks... I personally believe that Transocean will soundly outperform the broad market well into the future.

What do you think about Transocean -- or any other stock, for that matter? Make your voice heard on Motley Fool CAPS today. More than 110,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Chesapeake Energy is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days.

Foolish contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy always gets a perfect score.


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