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Real-Money Stock Picks / Messed-Up Expectations Portfolio
|Subject: Re: RIG vs ATW||Date: 12/10/2010 5:43 PM|
|Author: TMFGebinr||Number: 95 of 1071|
ATW appears to have better valuation metrics on P/E, margins, growth etc. Why RIG over ATW?
Good question. The answer basically comes down to what is being expected by the market for each. I looked at the two earlier, right after the initial purchase (http://boards.fool.com/im-curious-to-know-how-your-valuation...). Looking with the latest numbers, here's the comparison:
So, the market is expecting a whole bunch more from Atwood than from Transocean. Granted, it's now expecting more from Transocean than when I first purchased, but it's still a lot less than what it's been able to do in the past -- 6.5% first five years expected CAGR compared to 35.9% over the past five years.
For Atwood, the discrepancy isn't as large -- 22.7% first five years expected CAGR compared to 50.4% over the past five years.
Atwood is certainly a good company, it just doesn't fit with the way I'm picking companies for this portfolio. At least right now.
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