4-Star Stocks Poised to Pop: Seahawk Drilling

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, offshore driller Seahawk Drilling (Nasdaq: HAWK  ) has earned a respected four-star ranking.

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

Seahawk facts

Headquarters (founded) Houston (2008)
Market Cap $112.2 million
Industry Oil and gas drilling
Trailing-12-Month Revenue $146.22 million
Management

CEO Randall Stilley (since September 2008)

CFO James Easter (since May 2010)

Trailing-12-Month Return on Equity (19.9%)
Revenue Growth (over past year) (74.8%)
Cash/Debt $47.9 million / $6.4 million
Competitors

Diamond Offshore (NYSE: DO  )

Noble (NYSE: NE  )

Nabors Industries (NYSE: NBR  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 97% of the 202 members who have rated Seahawk believe the stock will outperform the S&P 500 going forward. These bulls include WPThatcher and Retracement.

Late last month, WPThatcher offered a simple reason for why Seahawk should soar: "Selling for way less than its liquidation value."

Shares of Seahawk have been absolutely crushed for its Gulf of Mexico exposure, but many Fools believe it's now way too beaten to pass up. For example, Seahawk's price-to-book (0.3) is considerably lower than that of rivals Diamond Offshore (2.6), Noble (1.2), and Nabors (1.1), as well as the more obvious offshore plays such as BP (NYSE: BP  ) (1.5) and Transocean (NYSE: RIG  ) (1.0). While the Gulf of Mexico may not be completely open for business yet, CAPS member Retracement thinks most of Seahawk's risks are baked well into the price:

If someone offers me a deal to buy something for less than 25 cents on the dollar value wise on a company which has the second-largest fleet of jack-up rigs in the Gulf of Mexico and DD shows a big catalyst behind current depressed earnings and resulting valuation being a very rare event like the Macondo spill, it warrants a further look.

[Seahawk] will face a bumpy road ahead in its efforts to diversify the business and to try to insulate the company from regulatory uncertainties in the US Gulf, but I feel that my 'margin of safety' on this stock is about as good as it gets buying at current market prices.

What do you think about Seahawk, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Noble. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (3) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 25, 2010, at 12:14 PM, gugudada wrote:

    I think you must be nuts! :) How you can recommend this one is beyond belief...

  • Report this Comment On October 26, 2010, at 3:24 PM, emroc60 wrote:

    I agree with gugudada. This is from a recent Morningstar report. Worth the read if your into bottom fishing value in the drillers. Better know what they do!

    "Unfortunately, there has been limited progress for shallow-water drillers. The administration has very effectively halted shallow-water drilling in the Gulf by basically refusing to issue any new drilling permits, which has created a de facto moratorium. The hardest impacted players are Gulf specialists such as Seahawk Drilling (HAWK) and Hercules Offshore (HERO), but larger drillers like Diamond Offshore (DO) and Ensco also have a few Gulf rigs."

    Article:

    http://news.morningstar.com/articlenet/article.aspx?id=35508...

    Also a good report by 24/7 Wall Street on drillers.

    Shallow water drillers typically look for gas. With shale plays on land creating such volumes in natural gas supplies it's hard to see value in HAWK in the short run.

  • Report this Comment On February 23, 2011, at 12:30 PM, PaulaB9 wrote:

    Boy did you miss the mark on this one! Fortunately I sold instead of buying more. Somebody didn't do their due diligence before recommending this one!

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1343267, ~/Articles/ArticleHandler.aspx, 10/25/2014 9:26:09 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement