Q&A:
Specific Stocks
Why does RIG continue to have such a low PE when its prospects seem so high?
This is a great question. Transocean (RIG) is trading at barely 8 times forecasted earnings. Historically, the company has had volatile earnings, since its drilling rigs are so massive that it can occasionally have “windfall” quarters. One reason that the stock rallied after the Global Santa Fe merger is that it was perceived that RIG’s earnings in the future would be more stable due to its expanded operations. The company has a tremendous order backlog and is a classic example of how you can find a great growth stock at a low price-to-earnings ratio.
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Week of 07.21.08
| Video Demo |
| Stock | Symbol | Grade | |
|---|---|---|---|
| BP PLC (ADS) | BP | B | BUY |
| Chevron Corp. | CVX | B | BUY |
| Exxon Mobil Co | XOM | C | HOLD |
| Hess Corp. | HES | A | BUY |
| PetroChina Co. | PTR | B | BUY |
| Sunoco Inc. | SUN | D | SELL |
| Tesoro Corp. | TSO | F | SELL |
| Stock | Symbol | Grade | |
|---|---|---|---|
| Brinker Intern | EAT | C | HOLD |
| CBRL Group Inc | CBRL | D | SELL |
| Cheesecake Fac | CAKE | C | HOLD |
| DineEquity Inc | DIN | F | SELL |
| P.F. Chang's C | PFCB | C | HOLD |
| Ruby Tuesday I | RT | F | SELL |
| Ruth's Hospita | RUTH | F | SELL |
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