Weekly stock performance
After a fantastic run for Seadrill (SDRL) in week 20, the stock fell in the following week. In week 20, Seadrill reached a 52-week high of $0.73. The stock rose more than 98% in week 20. This situation turned around in week 21 (week ending May 25) and the stock fell more than 32%. We already mentioned in our previous article that the stock rise was not based on fundamentals. Also, Seadrill’s technicals suggested the stock was overbought and overvalued. Thus, a fall in Seadrill’s price was expected.
All the offshore drilling stocks traded in the red in week 21:
- Seadrill Partners (SDLP) fell 10.0%.
- Transocean (RIG) fell 10.1%.
- Noble (NE) fell 9.4%.
- Diamond Offshore (DO) fell 9.5%.
- Rowan Companies (RDC) fell 9.0%.
- Ensco (ESV) fell 10.2%.
The VanEck Vectors Oil Services ETF (OIH), which has 22.3% of its holdings in oil and drilling stocks, fell 7.8%.
Even after week 21’s fall in stock price, Seadrill still has a whopping 82.8% year-to-date return as of May 25. Transocean, Ensco, and Noble also have positive year-to-date returns. On the other hand, Seadrill Partners, Diamond Offshore, and Rowan Companies have a negative year-to-date return of 8.4%, 4.5%, and 2.9%, respectively.
In the next part of the series, we’ll see how analysts revised target prices and recommendations for offshore drilling stocks last week.