Some people are going to look at today’s Bull of the Day and think that I’ve completely lost it. They’re going to say I don’t know what I’m talking about and that I’ve made the worst stock pick ever. I know there’s a risk of me sounding like a complete idiot here. But hey, it wouldn’t be the first time I got a fist full of haters talking about my stock pick and it probably won’t be the last. But maybe, just maybe, I’m crazy like a fox.
Today’s Bull of the Day is Ocean Rig (ORIG). Ocean Rig is an offshore drilling contractor that provides oilfield services for offshore oil and gas exploration, development, and production drilling. It specializes in the ultra-deepwater and harsh-environment segment of the offshore drilling industry. Now before you go pulling out your pitchforks and storming the castle, think about this. Maybe, just maybe, the worst is priced in already. Maybe, just maybe, these are the dark days for oil and it will get better from here. Maybe.
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Surprisingly Ocean Rig is a Zacks Rank #1 (Strong Buy). Even more surprising is our Zacks Consensus Estimate for the current year was $2.00 just ninety days ago. No, that’s not an error, this is a company we thought would make $2 a share this year and yes, it’s trading at $1.44. Let that sink in for a little bit. Like a late infomercial, wait, there’s more. Over the last week, two analysts have increased their earnings estimates for the current year from $2.00 to $2.39. Again, the stock is trading at $1.44.
Now before you get too excited and load the boat on this one, there’s still some major risk. Next year’s consensus, while up from 83 cents, still sits down at $1.44. That’s a significant drop off from this year’s $2.39 EPS number. What’s more surprising to me has been the earnings surprises for ORIG. The stock has surprised to the upside three quarters in a row. The most recent beat coming in at 58 cents versus expectations for 44 cents per share. Before that we had a 31 cent beat and a 36 cent beat.
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Again, I’m not saying this is a sure thing by any stretch of the imagination. But if you’re looking for a roll of the dice that may work itself back into the good graces of the market over the next several months, perhaps you should give this name a shot.
Be sure to click FOLLOW THE AUTHOR above to stay on top of all the hot momentum stocks at Zacks.com. David Bartosiak is the Momentum Stock Strategist with Zacks, editor of the Momentum Trader and Home Run Investor, and host of “Trending Stocks”
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