Top-level insiders such as CEOs and Chairmen tend to have an excellent understanding of their companies’ operating activities. If they’re buying company stock, it’s often a sign that the outlook for the business, and the share price, is attractive.
In this report, we are going to highlight some interesting buying activity from a top-level insider at Transocean Ltd (RIG:US). Transocean is the world’s largest offshore drilling contractor by revenue. Its customers include Royal Dutch Shell, Equinor, and Chevron. The company is listed on the New York Stock Exchange and currently has a market capitalization of approximately $2.95 billion.
Insider Buying at Transocean
Our insider transaction data shows that on November 9, Chairman Chad Deaton purchased 50,000 RIG shares at a price of $4.07 per share. This trade cost the insider $203,450 and increased his holdings to 111,000 shares.
Mr. Deaton has considerable company and industry experience. He has served as a director of the company since 2012 and as Chair since 2019. Previously, he served as Chair and CEO of Baker Hughes. Earlier in his career, he worked at Schlumberger in a variety of roles. This background means that he is likely to have a good understanding of Transocean’s prospects.
Transocean has momentum right now due to the strength of the oil market.
For Q3 2022, the company reported total contract drilling revenues of $691 million, up from $626 million in Q3 2021. Adjusted EBITDA came in at $268 million versus $245 million a year earlier.
And the company’s backlog remains strong. As of the October 2022 Fleet Status Report, its backlog was $7.3 billion.
“The robust demand for our assets and services helped us secure an incremental $1.6 billion since our July 25 Fleet Status Report, contributing to our already industry-leading backlog. We remain encouraged by the sustained strength in the offshore drilling market globally and expect demand for the increasingly scarce high-capability drilling rigs Transocean owns and operates to remain strong for the foreseeable future, resulting in higher utilization and day rates," said CEO Jeremy Thigpen in the company’s Q3 results.
In light of this strong backlog, we see the insider buying here as a bullish indicator.