Out Fox The $treet

After warnings from a number of sources highlighted the current pause in the offshore drilling sector, Noble Corp. ( NYSE: NE     ) reported solid first-quarter earnings that smashed estimates. The stock wasn't so upbeat, however, trading slightly down. The offshore driller continues to transition the fleet to a more modern one with high specification ultra-deepwater drillships and high-specification jackups. Also, Noble is in the midst of spinning off the old standard specification rigs into a new firm called Paragon Offshore via an IPO later this year. Read the full article here . Disclosure: No position mentioned. Please review the disclaimer page for more details. 

After reporting earnings on Jan. 22, investors continue to sell off shares of Noble Corp  ( NYSE: NE     ) due to fears of a cyclical downturn in the previously robust offshore drilling market. The company is busy completing a newbuild program that will modernize the fleet while at the same time spinning off the older standard assets into Noble Spinco. The spinoff will help focus the company into two separate companies with different objectives to benefit shareholders, but the old assets might lose significant value in a cyclical downturn. The stock sold off on the news of an industry pause, but people appear to be missing the extreme valuation and the limited slowdown forecasted by management of Noble. In addition, the suggested pause probably has a different impact on companies with a young fleet of premium, high-specification rigs such as SeaDrill ( NYSE: SDRL     )  as opposed to companies with older fleets such as  Transocean ...