Frederik Mohn, a director and major holder at
Transocean (RIG) recently bought another 1,000,000 shares. The buy increased his position by 1 percent, and came to a total cost of $4.89 million.
Mohn was a buyer last September, picking up 1.97 million shares. And a 2 million share buy in May 2022. Other insiders were buyers back in early 2022. Otherwise, two company insiders have been small sellers of shares over the past year.
Overall, Transocean insiders own 11.8 percent of shares.
The offshore oil and gas services contractor is down 30 percent over the past year, far underperforming the market.
Weak energy prices and the relatively high costs of offshore oil drilling have impacted profitability, although revenues did rise by 22 percent last year.
Shares will likely move higher or lower depending on movements in oil prices. But at its current price, shares trade at just 0.4 times their book value.
Action to take: Investors looking for a stock that can rally big on a move higher in oil may like shares at today’s prices. Transocean is somewhat leveraged, having about $2 in debt for every $1 in equity.
At present, Transocean does not pay a dividend.
For traders, shares have been trending lower but have started to tick higher in recent weeks. Energy is entering a period of seasonal strength.
The August $7.00 calls, last trading for about $0.25, could see mid-to-high double-digit returns should shares continue their new rally higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.