Transocean (RIG) missed slightly for Q4/full year earnings, with an early morning decline of -3% (intraday low: $41.44). Despite a latter day recovery, closing -1.1% @ $42.55, RIG is well below the old busted key support zone of $50/47.
The Oil and Gas sector is one of the most unloved sectors in market land. Whilst profit less stocks like AMZN and TWTR continue to gain, the heavy industrial companies - such as Transocean and Seadrill, remain under constant downside pressure.
The bigger weekly chart for RIG is especially lousy, and we have a possible large multi-week bear flag developing.
With a forward PE of just 7, RIG is - on some level, undervalued by at least 30/50%, but as ever...'it is...what it is.
see key stats@ Yahoo! finance
For now, from a pure price perspective, RIG is a broken stock, and looks vulnerable to slipping into the 30s. If the main market does see a (however brief) multi-month decline this late spring/summer, then RIG will surely continue to fall.
I have even seen talk of an eventual floor in the 20s - which is indeed where it has floored a few times in the past decade. Yet..the low 20s is another 50% lower, and that would give a PE of 6/4.
Crazy market...crazy prices.