Charles MaxwellTransocean Inc.RIGTOP PICKAug 20, 2004

High debt, which they are paying down from free cashflow. Rig counts are up, a big milestone. Super-duper, high beta name to own when oil's not falling 5% in a day. Be strategic when to add. 12-ish% free cashflow yield, but see his Top Picks for a more compelling name.

Given the high spot price of oil now, you need to go to a high-beta oil name to capture a return.

It's the highest paid way to play oil.

A very choppy chart. Trade it. It's on the upswing now, so be ready to unload it.

It's stuck below $10. Flatlined for so long. Wouldn't buy it.

This is definitely on the whippy end of the spectrum for drillers. Ultimately, you really have to believe that energy is turning. He doesn’t see sufficient evidence to make that claim.

The whole energy complex is falling today. There are concerns that people priced in too much growth in some of the pro-growth policies Mr. Trump wants to push, which are going to come later and more diluted. However, this is a survivor in energy and is the go-to company when it comes to deep-water drilling. Energy prices are still too cheap, and over the long haul they are going to drift higher, and this company will be a beneficiary. You could use pullbacks like this to add to your position.

It is a rig company and so is suffering badly. It is bleeding cash right now. It is too early to get into the oil related sector and this is a risky type of company.

One issue with these companies is where does oil go? This was trading at some value below the value of their actual rigs out there. He believes oil will be higher over the longer-term and this is a good company. If you compare the volatility over the next little while, it will do well and you can see a reasonable rate of return on it. Probably worth buying at these levels.

These stocks have been hammered down because they are dependent on others. This is well-run and there has been some consolidation. Expects there will be some near-term negatives before you see the ultimate positives.

Big in offshore drilling. You could make a case that the value of the rigs is worth more than the share price right now. Oil/gas business is in a difficult environment, especially on the offshore side where costs are much higher. Expects oil will go down a little bit more when you will have a better opportunity to buy it.

As of last week, this traded under his EVB -3 at $24.61 and is now down to $19.90. His strategy suggests that there will be some large write-offs coming. The dividend is not safe.

Looking at what is happening in offshore drilling right now, there is still too much supply and pricing is coming down. Thinks the company has been mismanaged for the last couple of years.