What do you guys think about the seadrill stock?
I'm not a super experience investor, but I'm also not an idiot when it comes to this stuff either.
Could I possibly lose on an investment on this? Is it even possible for the price to stay below $2 forever? Or could it go out of business and I would lose the money? Or should I wait for Iran to start selling their oil too?
oil has been fairly volatile lately so personally i just stay away from risky investments like this.
If you really do want to invest i would spend a whole boat load of time researching oil. From what i've read, it doesn't seem that a lot of people expect oil to rally anytime soon.
Righto - /biz/ level analysis.
>Seadrill Limited is an international offshore drilling contractor providing drilling and well services. Seadrill's versatile fleet includes harsh-environment semi-submersibles, jack-ups, shallow and deep water tender rigs and deepwater drill ships. In addition, the Company provides platform drilling, well intervention and engineering services. Seadrill Limited is based in Hamilton, Bermuda.
First off, the company is based in Bermuda. I've never touched it for that reason alone even when it was doing well.
Second, they're a contractor for the oil industry. At a time when capex for oil companies is at the lowest it's been this century. That means they customers (their primary income) aren't using them. With oil prices so low they're going to be burning through cash pretty quickly. Eating up whatever equity the company has as they do it. At a burn rate of what looks to be $2-3 per quarter and a book share of around $18, they won't last very long at these prices. That's just at a glance. It could be worse if I really looked into it.
Third, their dividend history is a poster child for a company that doesn't give a crap about their shareholders.
No. I would not buy it. Not even to gamble.