The biggest risk facing the offshore drilling industry is a potential oversupply of rigs currently being built. Seadrill (NYSE: SDRL) alone has 27 rigs under construction, which could either drive earnings growth or result in dropping dayrates. Contributor Travis Hoium thinks industry trends are still heading in the right direction and Seadrill is still the top stock in offshore drilling.
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Oversupply is the biggest risk to huge growth for SeaDrill.
Fool contributor Travis Hoium manages an account that owns shares of Seadrill. The Motley Fool recommends Seadrill. The Motley Fool owns shares of Seadrill and Transocean. 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 Motley Fool has a disclosure policy.
Stocks Mentioned
SeaDrill Limited
SDRL
Transocean
RIG
$2.77
(-1.07%)
$0.03
Noble
NEBLQ
Valaris plc
VAL
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
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