Transocean Ltd. (RIG)

[xray44b9]

Your smart friend is right. You should avoid any major investment here probably until late spring/summer or later, if ever. First the div will get cut or eliminated, you can be sure of it. There will be lower revenue forecasts and, as oil keeps dropping, so will the EPS estimates for RIG and all of the drillers. I would say this stock will probably flirt with the upper single digits sometime this year before it can make any kind of recovery. And there's no guarantee there will be one. It could just be a single-digit midget till kingdom come. So much technical damage has/will be done to the stock plus all of the credit issues/belt tightening, hugely lowered outlook and forward EPS forecasts that, IMHO, Transocean will probably be lucky to ever see the mid-20's again, even if oil eventually recovers to the 70-80 range.

This year, 2014, will be remembered as the year when oil stocks started their "new era" of a radically shrunken business due to the glut of oil and dropping demand. The company's business models and stocks will be hugely negatively impacted by the plunging price of crude and the resulting collateral damage to the overall world markets will be the big theme of 2015. Oh and FYI, Transocean is a Swiss company and is incorporated in Switzerland.