Traders Buy Large Volume of Put Options on Transocean (NYSE:RIG)

Key Points

• Unusual bearish options activity: Traders bought 41,673 put options on Transocean, about 53% above the stock’s typical daily put volume.
• Insider and institutional buying continued: Director Chad Deaton increased his holdings by 17.29%, while hedge funds and other institutional investors own 67.73% of the company.
• Analyst sentiment remains mixed: Transocean has a consensus “Hold” rating and an average price target of $6.82, despite recent analyst target increases and a quarterly revenue beat. Shares recently traded at $5.21 after the company missed earnings expectations.

Transocean Ltd. (NYSE:RIG - Get Free Report) saw some unusual options trading on Tuesday. Stock traders acquired 41,673 put options on the stock. This is an increase of approximately 53% compared to the typical daily volume of 27,307 put options.

Insiders Place Their Bets

In other news, Director Chad C. Deaton bought 35,000 shares of the stock in a transaction on Thursday, July 2nd. The stock was acquired at an average price of $4.95 per share, with a total value of $173,250.00. Following the acquisition, the director directly owned 237,421 shares in the company, valued at approximately $1,175,233.95. This trade represents a 17.29% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. 9.70% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Transocean

Several hedge funds have recently made changes to their positions in RIG. Vanguard Group Inc. grew its holdings in Transocean by 2.6% during the 4th quarter. Vanguard Group Inc. now owns 97,006,263 shares of the offshore drilling services provider's stock valued at $400,636,000 after buying an additional 2,487,015 shares in the last quarter. Dimensional Fund Advisors LP increased its holdings in Transocean by 12.3% during the 1st quarter. Dimensional Fund Advisors LP now owns 48,819,576 shares of the offshore drilling services provider's stock worth $323,682,000 after acquiring an additional 5,349,264 shares during the period. Dalal Street LLC lifted its stake in Transocean by 10.6% in the 4th quarter. Dalal Street LLC now owns 27,040,133 shares of the offshore drilling services provider's stock worth $111,676,000 after purchasing an additional 2,597,801 shares in the last quarter. Morgan Stanley lifted its stake in Transocean by 9.4% in the 4th quarter. Morgan Stanley now owns 24,790,325 shares of the offshore drilling services provider's stock worth $102,384,000 after purchasing an additional 2,135,964 shares in the last quarter. Finally, State Street Corp boosted its holdings in Transocean by 13.1% in the 4th quarter. State Street Corp now owns 24,725,897 shares of the offshore drilling services provider's stock valued at $102,118,000 after purchasing an additional 2,856,372 shares during the period. 67.73% of the stock is currently owned by hedge funds and other institutional investors.

Transocean Stock Performance

Shares of RIG stock traded up $0.07 on Tuesday, hitting $5.21. 23,268,278 shares of the stock were exchanged, compared to its average volume of 40,227,109. The firm's 50 day moving average is $5.47 and its two-hundred day moving average is $5.89. Transocean has a one year low of $2.76 and a one year high of $7.66. The firm has a market capitalization of $5.82 billion, a PE ratio of -1.75, a P/E/G ratio of 3.79 and a beta of 1.32. The company has a current ratio of 1.54, a quick ratio of 1.20 and a debt-to-equity ratio of 0.60.

Transocean (NYSE:RIG - Get Free Report) last released its quarterly earnings data on Monday, May 4th. The offshore drilling services provider reported ($0.03) EPS for the quarter, missing the consensus estimate of $0.07 by ($0.10). The business had revenue of $1.08 billion for the quarter, compared to analysts' expectations of $1.02 billion. Transocean had a negative net margin of 66.79% and a positive return on equity of 0.88%. Transocean's revenue for the quarter was up 19.3% compared to the same quarter last year. During the same period last year, the company earned ($0.10) earnings per share. Sell-side analysts expect that Transocean will post 0.13 earnings per share for the current fiscal year.

Wall Street Analysts Forecast Growth

A number of equities analysts have recently issued reports on RIG shares. TD Cowen increased their price objective on shares of Transocean from $5.50 to $6.00 and gave the stock a "hold" rating in a research report on Wednesday, May 6th. Susquehanna reduced their price objective on shares of Transocean from $8.00 to $7.00 and set a "positive" rating for the company in a research report on Wednesday, July 8th. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Transocean in a research report on Friday, July 17th. Morgan Stanley increased their price target on shares of Transocean from $5.00 to $7.00 and gave the company an "equal weight" rating in a research report on Wednesday, April 15th. Finally, Barclays raised shares of Transocean from an "equal weight" rating to an "overweight" rating and lifted their price objective for the stock from $6.00 to $8.00 in a research report on Thursday, May 7th. Three analysts have rated the stock with a Buy rating, five have assigned a Hold rating and three have assigned a Sell rating to the stock. According to MarketBeat.com, the stock presently has a consensus rating of "Hold" and a consensus target price of $6.82.

About Transocean

Transocean Ltd. is a leading international provider of offshore contract drilling services for the oil and gas industry. The company specializes in the operation of mobile drilling units, including ultra-deepwater drillships, semisubmersible rigs and high-specification jackup rigs. Transocean's fleet is designed to meet complex drilling requirements, from ultra-deepwater well construction to shelf exploration and development projects.

The company's core services encompass the full spectrum of offshore drilling operations, including project and engineering management, marine operations, drilling supervision, and maintenance support.

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