8 Best Stocks Under $10 To Invest In Now

04. Transocean Ltd. (NYSE:RIG)

Number of Hedge Fund Holders: 42

Share Price as of September 10: $4.3 

Transocean Ltd. (NYSE:RIG) is a leading provider of offshore contract drilling services for oil and gas wells worldwide. The company offers mobile offshore drilling rigs, related equipment, and work crews to serve its clients, which include integrated energy companies, government-controlled energy firms, and independent energy companies. The firm operates a robust fleet of ultra-deepwater and harsh environment floaters, making it a prominent player in the offshore drilling industry. Founded in 1926, Transocean is headquartered in Steinhausen, Switzerland.

As of the second quarter of 2024, Transocean Ltd. (NYSE:RIG) was held by 42 hedge funds, a slight decrease compared to 46 in the previous quarter. Despite this, the company’s financial performance remains strong, driven by a combination of increased day rates and higher contract duration.

In Q2 2024, Transocean Ltd. (NYSE:RIG) reported adjusted EBITDA of $284 million on revenues of $861 million, reflecting an adjusted EBITDA margin of approximately 33%. This strong performance was primarily due to an impressive revenue efficiency of 97%, demonstrating the company’s operational reliability and excellence. Transocean Ltd. (NYSE:RIG) ability to maintain high revenue efficiency amid mobilizing nearly 40% of its active fleet worldwide is a testament to its strong execution and operational capabilities.

Transocean Ltd. (NYSE:RIG) recent contract wins underscore its competitive positioning in the industry. The company secured several high-value contracts, including a two-well contract for its Deepwater Atlas at a leading rate of $580,000 per day, and a three-year contract for its Deepwater Invictus at a rate of $485,000 per day. The firm’s fleet is now over 90% committed through the end of 2025, which positions it well to capture further market opportunities as global offshore drilling investments are projected to grow significantly.

With robust cash flows from these new contracts, Transocean Ltd. (NYSE:RIG) is well-positioned to reduce its leverage, enhancing its financial health. Additionally, the company’s strategic focus on deepwater and harsh environment markets, where demand is expected to grow, further solidifies its bullish outlook. Overall, Transocean Ltd. (NYSE:RIG) strong financial metrics, extensive contract backlog, and positive industry dynamics make it an attractive stock under $10 for investors seeking exposure to the oil and gas drilling sector.