Rowan (RDC, Financial) is an offshore driller. Offshore drilling is a dirty term among investors these days, but the industry has to exist. As great as shale is it can’t supply every barrel. RDC has a significant revenue backlog and a fleet of young high-spec rigs. They also have a self-help opportunity set to improve margins and drive efficiencies that they are already making tangible progress on. They do not have any financial commitments to pay for additional newbuild rigs, unlike many peers. And they have significant liquidity. Consider that their market cap is $2 billion. Against that, they have $200 million in cash and $800 million in cumulative free cash flow over the course of 2016/17 in our Low Case.
From FPA Capital Fund (Trades, Portfolio)'s third quarter 2015 letter to shareholders.
