Buy - Price 26.40 on April 1
by Jesup & Lamont

Ensco announced a delayed startup on Ensco 8500 [deepwater-drilling unit]...due to crane replacement; Ensco's fleet includes 51 drilling units. We are lowering our '09E-earnings to 6.50 from 6.60 per share...an earnings multiple of 8 times our new '10E- earnings of $5.50 a share yields a target of 44. With the stock at 26.40, or 4.1 times current '09 earnings, the upside potential justifies our Buy rating. Market cap: $3.7 billion.

The offshore driller with headquarters in Dallas, Texas, announced that it will add $500 million to its repurchase plan. The new buyback amount was approved just as Ensco nearly completed its previous $1 billion-dollar buyback plan, by which the company repurchased 16.5 million shares worth $937.6 billion. The new buybacks will be financed with available cash.

On July 24, 2008 the company reported record second-quarter results with net income swelling 17% to $2.96.7 million, or $2.07 a share, from $254.4 million, or $1.72 in the same period last year. Total revenue was $637.1 million, up from $548.6 in the year-ago period.

Dan Rabun, Chairman, President and CEO, commented on the Company's results, "Increases in average day rates in all regions and asset classes contributed to the sequential improvement in our second quarter results, and to another record quarter.”

While most U.S. companies continue their downward fall, Ensco and their fleet of 53 rigs, has performed quite well in the face of turbulent markets. Ensco is up 10% on the year, compared to the DOW which is down nearly 21% on the year.

We like to see that Jefferies & Company has a buy rating and 85-dollar price target on the stock. Analyst Judson E. Bailey added, “Despite the pullback in commodity prices and ESV shares, we believe ESV remains well-positioned for growth through its deepwater growth initiatives, a more robust international jack-up market than expected and near term benefits from GOM market strength.”

Drilling favorite

high roe, no debt

The offshore driller with headquarters in Dallas, Texas, announced that it will add $500 million to its repurchase plan. The new buyback amount was approved just as Ensco nearly completed its previous $1 billion-dollar buyback plan, by which the company repurchased 16.5 million shares worth $937.6 billion. The new buybacks will be financed with available cash.

On July 24, 2008 the company reported record second-quarter results with net income swelling 17% to $2.96.7 million, or $2.07 a share, from $254.4 million, or $1.72 in the same period last year. Total revenue was $637.1 million, up from $548.6 in the year-ago period.

Dan Rabun, Chairman, President and CEO, commented on the Company's results, "Increases in average day rates in all regions and asset classes contributed to the sequential improvement in our second quarter results, and to another record quarter.”

While most U.S. companies continue their downward fall, Ensco and their fleet of 53 rigs, has performed quite well in the face of turbulent markets. Ensco is up 10% on the year, compared to the DOW which is down nearly 21% on the year.

We like to see that Jefferies & Company has a buy rating and 85-dollar price target on the stock. Analyst Judson E. Bailey added, “Despite the pullback in commodity prices and ESV shares, we believe ESV remains well-positioned for growth through its deepwater growth initiatives, a more robust international jack-up market than expected and near term benefits from GOM market strength.”

Outperform -- Price 64.63 on Aug. 26
by FBR Capital Markets

Our month jackup [-rig] backlog report indicates there should be a pro forma average shortage of six rigs over the next nine months, up from three... . This could put upward pressure on day rates... . A $10,000 increase in day rates would increase Ensco's EPS to 12% above consensus in 2010 ... [and] EPS should increase to $9.70 and $11 for 2009 and 2010, respectively -- 9% and 12% above consensus estimates. Market cap: $9.3 billion.

4.6

growth

Deutsche downgraded seven offshore drillers. RIG and ESV were downgraded to Sell, Deutsche Bank said. Ratings on DO, HERO, NE, PDE and RDC were also cut to Hold, as the stocks are already pricing in several quarters of strong results.

Ensco (ESV) was downgraded from Buy to Hold, Citigroup said. Latest rig status report shows troubling trends on the international rig side. $77 price target.

I owned for a little while because I thought it had the most attractive valuation. The reason the street hates it is because it is overexposed to shallow water drilling. I would stay away from this stock, too much competetion in the shallow drilling market.

This is a driller with heavy exposure to shallow water off shore wells in the Gulf of Mexico. It is a hedge against the oil drilling industry