Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, contract driller Diamond Offshore Drilling (NYSE: DO) has earned a coveted five-star ranking.

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

Diamond Offshore facts

Headquarters (Founded) Houston (1989)
Market Cap $8.1 billion
Industry Oil and gas drilling
Trailing-12-Month Revenue $3.34 billion
Management

CEO Lawrence Dickerson (since 2008)

CFO Gary Krenek (since 1998)
Return on Equity (Average, Past 3 Years) 32.1%
Cash/Debt $981.1 million / $1.5 billion
Dividend Yield 0.9%
Competitors

Noble (NYSE: NE)

Transocean (NYSE: RIG)

Ensco (NYSE: ESV)


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 98% of the 2,010 members who have rated Diamond Offshore believe the stock will outperform the S&P 500 going forward. These bulls include ipsiety and Wyatt2luv.

This past summer, ipsiety listed several of Diamond Offshore's positives: "Good balance sheet. Has tremendous growth opportunity. Is at a discount in terms of P/E and PS."

Diamond Offshore even sports a cheapish price-to-cash flow of 6.2. That represents a discount to industry peers like Noble (8.8), Transocean (7.0), and Ensco (10.3).

CAPS member Wyatt2luv elaborates on the bargain opportunity:

Current Wall Street estimates are simply too pessimistic, DO earnings power can reach $12 per share in 2013 with the addition of the 3 newbuild 12,000 ultradeepwater drillships and two other newly built drillers that started working in 2010 bought at distressed prices in 2009. That means DO added 5 of the highest end drillips since 2009. DO earned close to $9.80 per share in 2009. ... 2010 was the year of the Macondo disaster which led to DO moving rigs outside of GOM and incurring a lot of costs along the way which depressed margins and earnings.

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