Fundamentals in Focus for Transocean (RIG)

Transocean Ltd. (NYSE:RIG) is on our radar right now but there could still be some opportunities on the horizon. Now trading with a market value of 4.39B, the company has a mix of catalysts and obstacles that spring from the nature of its operations. Everyone seems to have their own opinion of this stock. But what do the numbers really say? We think it’s a great time to take a fresh look.

Transocean Ltd. (NYSE:RIG) Fundamentals That Matter

It’s generally a good idea to start with the most fundamental piece of the picture: the balance sheet. The balance sheet health of any company plays a key role in its ability to meet its obligations and maintain the faith of its investment base. For RIG, the company currently has 3.2 billion of cash on the books, which is offset by 799 million in current liabilities. The trend over time is important to note. In this case, the company’s debt has been falling. The company also has 22.44 billion in total assets, balanced by 9.59 billion in total liabilities, which should give you a sense of the viability of the company under any number of imagined business contexts.

Transocean Ltd. (RIG) saw 256 million in free cash flow last quarter, representing a quarterly net change in cash of 193 million. Perhaps most importantly where cash movements are concerned, the company saw about 384 million in net operating cash flow.

Transocean Ltd. (NYSE:RIG) Revenue Growth Potential

As far as key trends that demonstrate something of the future investment potential of this stock, we need to take a closer look at the top line, first and foremost. Last quarter, the company saw 808 million in total revenues. That represents a quarterly year/year change in revenues of -0.11 in sequential terms, the RIG saw sales decline by 0.08.

But what about the bottom line? After all, that’s what really matters in the end. Transocean Ltd. (RIG) is intriguing when broken down to its core data. The cost of selling goods last quarter was 520 million, yielding a gross basic income of 288 million. For shareholders, given the total diluted outstanding shares of 391 million, this means overall earnings per share of -3.62. Note, this compares with a consensus analyst forecast of -0.22 in earnings per share for its next fiscal quarterly report.

Is Transocean Ltd. (NYSE:RIG) Valuation Attractive

Looking ahead at valuations, according to the consensus, the next fiscal year is forecast to bring about -0.89 in total earnings per share. If we consider a median price to earnings ratio on the stock, that corresponds with a stock price of 9,999. However, one should always remember: the trends are more important than the forecasts. This continues to be an interesting story, and we look forward to updating it again soon on Transocean Ltd..

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