Is It Time to Sell Seadrill?

Three ways you'll know it's time to sell Seadrill.

Jim Mueller, CFA
Jim Mueller, CFA and Austin Smith
Feb 15, 2013 at 2:00PM
Energy, Materials, and Utilities

There's a lot to like about Seadrill (NYSE:SDRL); but, in this video, Jim Mueller gives us three things to watch for as warnings signs to sell.  First, Seadrill is expanding its rig fleet rapidly and incurring significant debt doing so. Second, utilization rates need to at least stay level, and preferably increase. If rates start to decrease, this could be trouble for the company. Third, Seadrill is ordering new rigs without a guarantee that they will be used once the rigs are built. If oil prices drop or demand for deep rigs declines, Seadrill could be in for a rough time, and investors should seriously consider selling.