10 Oversold Energy Stocks To Buy Now

1. Transocean Ltd. (NYSE:RIG)  

Number of Hedge Fund Investors: 42  

Forward P/E Ratio as of November 5: 16.95

YTD Performance as of November 5: -30.26%  

Transocean Ltd. (NYSE:RIG) is one of the world’s largest offshore drilling contractors, specializing in ultra-deepwater and harsh-environment drilling. The company owns a global fleet of rigs, servicing major oil and gas companies across various regions.

On September 10, Transocean Ltd. (NYSE:RIG) announced a significant contract award for its ultra-deepwater drillship, Deepwater Atlas. The contract, valued at approximately $232 million, was secured with bp (formerly British Petroleum) for operations in the U.S. Gulf of Mexico. The agreement is for a period of 365 days, with an option to extend for an additional 365 days.

The contract is expected to commence in the second quarter of 2028, and the program will contribute significantly to the company’s backlog. The agreement does not include any additional services beyond the drilling contract. The Deepwater Atlas is a state-of-the-art drillship designed to operate in the most challenging offshore environments. The vessel is equipped with advanced drilling technology and has a strong track record of delivering high-performance drilling services.

On September 3, Transocean Ltd. (NYSE:RIG) agreed to sell two warm-stacked 6th-generation floaters. This move is a positive step towards reducing debt and focusing on more strategic assets. The sale of the two floaters, Discoverer Inspiration and Development Driller III, for $342 million will result in an estimated non-cash impairment charge of $630-645 million. The sale proceeds will be used to repay existing indebtedness, which will reduce the company’s debt-to-capitalization ratio. Moreover, the sale of these non-strategic assets is a prudent decision, as it allows the company to focus on its more valuable and in-demand assets.

Transocean’s (NYSE:RIG) active fleet, which includes high-specification 7th-generation drillships, is well-positioned to benefit from the expected increase in offshore drilling activity in 2025.

While we acknowledge the potential of Transocean Ltd. (NYSE:RIG) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than RIG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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