Ensco (ESV:NYQ) Scott Black thinks it looks good value, but so are many others!
Interesting comments in the January Barrons roundtable from Scott Black, founder and CIO of Delphi Management Inc, the value based investor, on one of his top picks for 2013, Ensco (ESV). We also think the deep water driller looks good value but so do many others in this space!
When Mr Black commented ESV was trading at US$60.88 and the company had a $14.1bn market cap. The current price is $64 and the market cap $14.7bn. IC comments in [brackets]. “It pays a dividend of $1.50, and yields 2.4%. Using the latest quarter’s revenue run rate of $4.5 billion and about $1.50 in earnings per share, I performed an analysis of incremental growth that took into account day rates, utilization rates, and new rigs coming on line. Ensco has a utilization rate of 91% in deepwater drill ships. Day rates are expected to increase by 10%, and utilization could…