Be Careful When Hunting For Value In Offshore Drilling

For value hunters and contrarian investors alike, the offshore drilling sector is now one of the market's most attractive sectors. However, the big question that needs to be answered is, when should you buy in?

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Offshore drilling stocks tradings at a significant discount

Indeed, with companies like Rowan Companies PLC (NYSE:RDC), Transocean LTD (NYSE:RIG), Noble Energy, Inc. (NYSE:NBL) and ENSCO PLC (NYSE:ESV) all trading at a significant discount to book value, the margin of safety available is attractive, although there's reason to suggest that valuations could fall even further from current levels.

For example, consensus suggest that Transocean LTD (NYSE:RIG) could encounter serious problems over the next 12 to 24 months as it struggles to find...