• Barron’s says value-oriented investors should take a look at Transocean (NYSE:RIG); analysts think shares can rise more than 35% over the next year or two.
  • Share prices indicate investors think they’re “dead” – far from reality, Bernstein’s Colin Davies says. He notes Transocean trades at a third of its estimated 2016 book value, while other drillers trade at half of their book value; and at a trailing P/E of five vs. its long-term median of 19.
  • CEO Jeremy Thigpen has emphasized efficiency, removing layers of management and closing down facilities. He’s been buying back its distressed debt at a discount, bringing its net debt down to $5.7B from $9.5B in 2011. Its $11B backlog is more than twice its nearest rivals.
  • “You have to position [yourself] beforehand, or you’ll miss the opportunity,” mutual fund manager Craig Hodges says. He has a $30 target on the $14 shares.
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