Friday, February 3, 2012

Approaching Intrinsic Value (IV)

I have recently reduced my position in Ensco PLC (ESV) by another one third @ $55.15.  Ensco continues to perform well, but is now close to being fully priced. My conservative estimate of ESV is around $60/share ( the intrinsic value of a company is moving target and can't be calculated with precision ) and I generally like to start selling as the price reaches 90% of IV. I'll continue to hold the last 1/3 of my position for now and monitor the Pride International merger and adjust IV accordingly. Also of interest, day rates for rigs are rising and that may explain the recent run for the drillers. We'll see if that lasts....

My initial purchase of ESV was @ $38.20 in 2010.

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