Investors looking for dependable penny stocks could leverage TipRanks’ penny stock screener. The tool helps in finding future winners. Using the screener, we came across Transocean (NYSE:RIG), which has gained investors’ attention and is up about 54% year-to-date. What stands out is that Transocean, which provides offshore-drilling services, sports a “Perfect 10” Smart Score on TipRanks.
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Shares carrying a “Perfect 10” Smart Score have easily outperformed the S&P 500 Index (SPX) by a significant margin (see the graph below).
Strong Demand Drives RIG Stock Higher
The company benefits from increased offshore contracting activity that drives day rates and utilization for Transocean. Further, the company continues to win new contracts and sports a robust backlog, suggesting that RIG is poised to deliver solid revenues in the future.
Overall, a strong demand environment, its high-quality deep under-water and harsh environment assets, and its industry-leading backlog of over $8.6 billion indicate that RIG could deliver strong financial performances in the coming quarters, which could lift its stock price.
Furthermore, the company’s focus on deleveraging its balance sheet, simplifying its capital structure, and reducing interest expenses augurs well for growth.
Is Transocean a Buy or Sell?
RIG stock has received one Buy, three Hold, and one Sell recommendation for a Hold consensus rating. Meanwhile, due to the recent rally, analysts’ average price target of $7.30 implies an upside potential of 4.41%.
While analysts remain sidelined, Transocean stock has received a positive signal from hedge funds. TipRanks’ data shows that hedge funds bought 9.1 million shares of RIG last quarter. Also, the company’s top insiders have demonstrated faith in RIG’s prospects and bought shares worth $640.4 million. With positive signals from hedge funds and insiders, RIG stock has a maximum Smart Score of “Perfect 10.”
