We recently compiled a list of the 12 Best High Volume Stocks to Buy According to Analysts. In this article, we are going to take a look at where Transocean Ltd. (NYSE:RIG) stands against the other high volume stocks.
Understanding trading volume is crucial for investors as it reveals the number of shares exchanged in a given period, which signals market interest and momentum. Stocks are classified as high or low volume based on this activity. High-volume stocks are the ones that are typically trading 500,000+ shares daily, and offer benefits like minimized volatility and tighter spreads, although they may involve speculative plays. Conversely, low-volume stocks present potential opportunities for value investors, though they carry higher volatility and liquidity risks. Analyzing volume helps identify market trends, confirm breakouts, and inform buy and/or sell decisions, especially for short-term trading strategies. However, it’s essential to consider volume alongside other factors for a comprehensive investment approach.
On February 20, Drew Matus, Chief Market Strategist at MetLife Investment Management, appeared on CNBC to discuss stock rotations and their implications for the market. When asked about the lack of upward revisions from the MAG7, Matus emphasized that it would be healthy for the market to see a rotation where the other 493 stocks in the S&P 500 begin to contribute more significantly. He explained that high concentration in equities tends to create instability, and a broader participation in growth would signal a healthier economic environment. The discussion then highlighted the evidence of this rotation, as the S&P Equal Weight index is up about 4.25% year-to-date, closely matching the 4.5% gain of the market-cap-weighted index. Matus acknowledged this trend and its importance, noting that slightly higher inflation has been manageable for companies able to pass along costs. He also pointed out that growth numbers remain strong and optimism persists, particularly among small business owners.
Methodology
We first used stock screeners to compile a list of stocks with high average 3-month volumes. We then selected 12 stocks that had a high average upside potential of over 25% and were the most popular among elite hedge funds. The stocks are ranked in ascending order of their average upside potential. We’ve also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An aerial view of an oil rig with drillers in hard hats working on the platform.
Transocean Ltd. (NYSE:RIG)
Number of Hedge Fund Holders: 38
Average Volume (3-Month): 23.828 million
Upside Potential as of February 19: 43.48%
Transocean Ltd. (NYSE:RIG) is a global leader in offshore contract drilling and provides essential services to the oil and gas industry. It operates through a sophisticated fleet of ultra-deepwater and harsh environment floaters and delivers critical drilling solutions to integrated, government, and independent energy companies worldwide.
Its primary revenue source is its advanced offshore drilling services. In 2024, it generated $3.5 billion in adjusted contract drilling revenues. The company secured high-value contracts, including rates exceeding $500,000 per day for advanced rigs. It focuses on securing long-term contracts for 2026 and beyond, with ongoing discussions in regions like the US Gulf, Latin America, and Norway. It secured a 4 well option with Reliance Industries in India at $410,000 per day till 2027. It also secured an 8-day option in Australia at $390,000 per day.
Transocean Ltd. (NYSE:RIG) is investing in technology to enhance safety and efficiency, including automation and robotics. It’s now focused on operational execution to convert its $3.1 billion backlog into revenue in 2025. The company is also working on reducing costs.
Overall RIG ranks 7th on our list of the best high volume stocks to buy according to analysts. While we acknowledge the potential of RIG as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high 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.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
