Jim Cramer on Tesla and Other Stocks

9. Transocean Ltd. (NYSE:RIG)

Number of Hedge Fund Holders: 42

Transocean Ltd. (NYSE:RIG) was recently discussed by Jim Cramer during his episode of Mad Money. Here’s what he had to say about the company:

“We hardly ever talk about the smaller offshore operators like Transocean, symbol RIG, I always love that… Transocean has lost money for the past 7 years. Its stock has plunged from $30 a decade ago to just below $4… in 2020 when oil prices collapsed at the beginning of the pandemic. Every major offshore driller except for Transocean went bankrupt but the stock rebounded dramatically from those lows before peaking at eight bucks and changed in the summer of last year. Since then it’s pulled back along with energy prices.”

Cramer highlighted the company’s two impressive eighth-generation drillships that are operational in the Gulf of Mexico. He called them “technological marvels”. Cramer went on to say:

“Second, Transocean’s in the news. Last night, Bloomberg reported that the company’s exploring a merger with smaller rival, Seadrill. I don’t really have much of an opinion on the potential deal but it signifies more confidence in the offshore space than I’ve seen in over a decade. By the way, of course, the industry needs consolidation. Honestly, this group has been so bad for so long that it’s tough to recommend them here but if you strongly believe that the price of oil’s headed higher next year or the year after then Transocean is a winner. Personally, though, I don’t want to bet on that.”

Transocean (NYSE:RIG) offers offshore contract drilling services for oil and gas wells globally, operating a fleet of mobile offshore drilling units, including ultra-deepwater and harsh environment floaters. The company provides rigs, equipment, and crews to integrated and independent energy companies, as well as government-owned energy companies.

On October 23, Bloomberg reported that Transocean (NYSE:RIG) has been engaged in discussions regarding a potential merger with rival offshore drilling contractor Seadrill Ltd. As oil explorers increasingly turn to offshore resources, these talks come at a time when the industry is experiencing renewed activity. Although conversations are ongoing about the possible structure of this merger, no final decision has been reached, and both companies may choose to continue operating independently.