Market Overview - The market recovery that began in early April continued throughout the third quarter, with small and micro-cap value stocks posting their strongest quarterly returns since Q4 2023 [2] - Small caps resumed upward momentum after a four-year pause, reaching new highs and breaking the price level peak of 2021, indicating the early stages of a multi-year outperformance cycle for low valuation equities and smaller market caps [2] Technology Sector Insights - The Technology sector's weighting in the S&P 500 increased to 34.8%, significantly above its earnings contribution, indicating crowded ownership and market valuation expansion [3][6] - The Technology sector is nearing its all-time high weighting of 34.9% from March 2000, with forward price-to-earnings multiples above 30x, compared to the 20-year historical average of 18.3x [6][7] - The price-to-sales multiple for the Technology sector is approaching 10x revenue, with the "Magnificent 7" companies nearing 13x, highlighting elevated valuations [8] Valuation Discrepancies - There are significant valuation spreads between low valuation equities and longer duration/technology equities, with Deep Value Select strategy's valuation multiples at over a 70% discount to the S&P 500 Index [10][12] - The small cap sector is emerging from a multi-year earnings recession, with expected earnings growth in 2026 anticipated to outpace larger companies [12] Performance of Deep Value Strategy - The Deep Value Select strategy achieved a quarterly return of +26.50%, outperforming the S&P 1500 Value Index and S&P 600 Value Index [14] - Year-to-date, the Deep Value Select strategy net returns are +9.20%, slightly behind the S&P 1500 Value Index [14] - Ten of the twelve holdings in the strategy delivered positive double-digit returns, with Nabors Industries being the largest contributor, up 46% [16] Company-Specific Highlights - Nabors Industries is undergoing a multi-year transformation focused on technology, with over 450 patents and a strong balance sheet following the sale of its Quail Tools business for $600 million [16][19] - Bread Financial, despite a 2% decline in market share price, has improved its capital ratios and reduced debt significantly, positioning itself for long-term financial targets [20]

Core Viewpoint - Borr Drilling Limited is set to release its financial results for Q3 2025 on November 5, 2025, after the market closes, with a conference call scheduled for November 6, 2025 [1]. Group 1 - The financial results will be available on the Investor Relations section of the company's website [1]. - Participants are encouraged to join the conference call 10 minutes early, which will take place at 10:00 AM New York time [1]. - A replay of the webcast will be accessible after the live call [3]. Group 2 - The company has announced new contract commitments for two of its premium jack-up rigs [5].

Company Overview - Borr Drilling Limited (NYSE:BORR) is an offshore shallow-water drilling contractor specializing in the ownership, operation, and contracting of modern jack-up drilling rigs for oil and gas exploration and production [3] Financial Performance - For the fiscal second quarter of 2025, Borr Drilling reported revenue of $267.70 million, which represents a year-over-year decrease of 1.54% but exceeded expectations by $5.46 million [2] - The earnings per share (EPS) for the same quarter was $0.14, surpassing estimates by $0.04 [2] Market Reaction and Analyst Ratings - Following the earnings release on August 13, the stock price increased by more than 9.5% [1] - Despite the positive earnings report, analysts have a cautious outlook; Truls Olsen from Fearnley Securities downgraded the stock to Hold with a price target of $2.5, and Scott Gruber from Citi initiated coverage with a Hold rating and a price target of $3.25 [2]

Company Overview - Precision Drilling Corporation is a leading provider of safe and environmentally responsible services to the energy industry, offering access to an extensive fleet of Super Series drilling rigs [4] - The company has commercialized an industry-leading digital technology portfolio known as Alpha™, which utilizes advanced automation software and analytics to deliver efficient, predictable, and repeatable results for energy customers [4] - Precision also provides well service rigs, camps, and rental equipment, supported by a comprehensive mix of technical support services and skilled personnel [4] Upcoming Financial Results - Precision intends to release its 2025 third quarter results after the market closes on October 22, 2025 [1] - A conference call is scheduled for October 23, 2025, at 11:00 a.m. MT (1:00 p.m. ET) to discuss the results [1] - Participants can register for the conference call to receive a dial-in number and unique PIN for questions [1][2] Webcast and Replay - The conference call will also be webcast, and a replay will be available on Precision's website for 12 months [2]

Core Points - ADES Holding has revised its merger offer for Shelf Drilling, increasing the cash consideration by 28% to Nkr18.50 ($1.88) per share [1] - The revised offer has received binding commitments, including ADES' own share, which represents 53.4% of the votes in favor of the merger [1] - Shelf Drilling's board has unanimously recommended the revised offer, which reflects a significant increase in support from 15% prior to the initial announcement [2] Financial Adjustments - ADES has raised its estimated annual cost synergies by $10 million, now totaling $50–60 million, up from the previous estimate of $40–50 million [2] - The updated terms indicate an approximate 6% increase in the total enterprise value that ADES will pay for the merger [2] Deal Structure and Timeline - ADES plans to call a new extraordinary general meeting to obtain shareholder approval for the revised offer [3] - The completion of the merger is expected in the fourth quarter of 2025, maintaining the original timeline announced on 5 August [3] - The acquisition will be executed as a cash merger under the laws of the Cayman Islands, with Shelf Drilling continuing as the surviving entity [4]

Group 1 - Borr Drilling Limited's CEO, Bruno Morand, will present at the Pareto Securities' 32nd annual Energy Conference on September 10, 2025, in Oslo, Norway [1] - A copy of the presentation is available on the company's website [1] - The company has announced new contract commitments for two of its premium jack-up rigs [3]

Company Actions - Nabors 宣布将其钻杆租赁业务 Quail Tools 出售给 Superior [1] - Nabors 的股票因此消息上涨，达到五个多月以来的最大涨幅 [1] Industry Dynamics - Nabors 是全球最大的陆地钻井设备供应商之一 [1]

Core Insights - The article emphasizes the importance of value investing, highlighting the strategy of identifying undervalued companies in the market [2] - Zacks has developed a Style Scores system to categorize stocks, with a focus on the "Value" category for value investors [3] Company Analysis: Precision Drilling (PDS) - Precision Drilling currently holds a Zacks Rank of 1 (Strong Buy) and a Value grade of A, indicating strong potential for value investors [4] - The Forward P/E ratio for PDS is 10.46, significantly lower than the industry average of 24.89, suggesting it may be undervalued [4] - Over the past year, PDS's Forward P/E has fluctuated between 4.90 and 12.48, with a median of 6.84, indicating volatility in valuation [4] - The P/B ratio for PDS is 0.6, which is lower than the industry average of 0.87, further supporting the notion of undervaluation [5] - PDS's P/S ratio stands at 0.53, compared to the industry's average of 0.71, reinforcing its attractiveness as a value stock [6] - Overall, the combination of these metrics suggests that Precision Drilling is likely undervalued and presents a strong investment opportunity for value investors [7]

Industry Outlook - The U.S. drilling industry is experiencing a challenging near-term outlook with rig counts continuing to decline since the April tariff panic [1] - Market expectations indicate that conditions are likely to worsen further in 2026, presenting potential opportunities for contrarian investors [1] Investment Perspective - There is a belief in the importance of thorough research to identify undervalued assets and construct long-term investment portfolios [1]

Core Insights - The energy sector is highlighted as a key area for investment, particularly due to recent oil inventory data indicating significant supply-demand dynamics [1][2][3] Oil Inventory and Market Dynamics - The U.S. oil inventory has seen its largest decline since December 2024, suggesting reduced need for oil storage amid economic slowdowns [3] - This decline in inventory could lead to price spikes if new demand emerges, indicating potential bottlenecks in the market [3] Company-Specific Insights Transocean Ltd. - Transocean's stock is currently priced at $2.76, with a 12-month price forecast of $4.58, representing a 66.24% upside [5] - The stock is trading at only 44% of its 52-week high, indicating that it has absorbed negative news, positioning it well for recovery as oil prices rise [6] - Analysts project a potential earnings per share (EPS) increase from a current net loss of $0.10 to $0.06, supporting the bullish outlook [8] Helmerich & Payne Inc. - Helmerich & Payne's stock is currently at $16.69, with a 12-month price forecast of $27.73, also indicating a 66.18% upside [10] - Institutional investment has increased significantly, with Vanguard Group acquiring a stake worth $286.2 million, representing 11% of the company [10] - Analysts forecast an EPS increase from $0.02 to $0.76 for the second quarter of 2025, reflecting confidence in the drilling sector [13] Occidental Petroleum Co. - Occidental Petroleum's stock is currently priced at $42.57, with a 12-month price forecast of $53.14, indicating a 24.82% upside [14] - There has been a 4.5% decline in short interest, suggesting a shift in investor sentiment towards bullishness [15] - Institutional buying has surged, with $1.1 billion in the most recent quarter and $1.7 billion in the previous quarter, indicating strong confidence in the stock and the energy sector [16]