Gordon Reid Ensco PLC ESV-N TOP PICK Jan 10, 2013

Likes this. Chart shows it has been affected by the same thing that affected Hornbeck Offshore Services (HOS-N) (see Past Picks). Represents good value. Has one of the youngest fleets. Utilization rates are very high. Making very good money.

The offshore oil drillers give him some concerns. The oil majors have slowed down. There has been quite a big build of oil rigs. The ultra deep water is where you want to be. From a value point of view this is a good time to look at this category. This is cyclical and it bounces around. You have to buy it correctly. Put it on your radar.

One of the largest offshore oil/gas drilling with one of the newest fleets in the business. Raised its dividend 50% and has a 5.8% yield.

We had an uptrend until the beginning of 2013 and then it broke down. It is levered and went down with the rest of the group. Let it settle down. It looks like it is trying to make a 52 week low. He thinks it has broken support.

Collect your dividend and they will come back.

(A Top Pick Dec 3/13. Down 28.70%.) There has to be stabilization of oil prices. If that happens, money will start to flow back into the sector. They have very strong fundamentals. Their backlog is growing with over 2 years of revenue in backlog. Grew their backlog last quarter by 10%. In the deepwater area, virtually all of their fleet is contracted out a couple of years. When oil stabilizes, you will start to see companies like this return to normalized multiples. Right now they are trading at about 4X EBITDA which is 30%-40% discount to where it should be trading at.

Has fallen quite a bit. Longer-term, this as an opportunity to not only recover, but to move up in terms of price. They are a deepwater driller. They have contracted 63% of their deepwater rigs for the next 18 months. The risk is going to be the day rates going forward. If oil stays down at these levels, there is no question that day rates will suffer. 10.3% dividend is high. They probably have the financial capability to pay it, but in this type of environment, a lot of companies would view it as quite responsible to draw back and to cut the dividend somewhat, in order to husband the cash. Feels this stock is okay.

Sold his holdings in February at around $30. The tough part of investing and the money making part, is making the difficult decisions when things are going against you. A certain part of his business plan is having a certain percentage of being wrong. Successful investors are right about 70% of the time.

(A Top Pick May 27/14. Down 49.77%.) Still has a very sound balance sheet and still has lots of deep-sea oil rigs. There is lots of new business coming and they have the most modern rigs. Unfortunately, the market doesn’t care. He had recommended Selling this back in March, take the losses and move on.. When the prices seem to have stabilized, there will be a bunch of companies that need their rigs.

(A Top Pick Nov 24/14. Down 55.81%.) This was probably the deepest cyclical area of the oil space, so he exited in Feb 2015 at $30.