Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Anurag --

He, he. I wasn't trying to convince you one way or another. But your question prompted me to look into this smaller position of mine for the first time in a while, and I think I convinced myself!

Nathan --

I think the capex is related to the purchase of all these new Tier 1 rigs, as they decommission older ones. I would think the investment rate will subside a bit over time. Meanwhile, I believe that if you could break out the expected ROIC for the new rigs, it would significantly exceed PDS's historical ROIC (otherwise, why would management do it?) and so, over time will help, not hurt, this metric.

Everyone --

Did you notice PDS reported this morning?

There's a ton of information there, which I haven't digested yet. Basically the top line declined because of a drop in drilling activity, causing fixed costs to be spread over a smaller revenue base. But dayrates are holding up because of their 70 new tier 1 rigs. Revenue dropped 7% while drilling activity dropped 23%. I don't think any of that is a surprise. Earnings were a beat -- 0.33 vs. 0.30 expectation. Revenue beat by 1%.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.