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RDC - Rowan Companies $27.95

Rowan Companies (NYSE:RDC) is a provider of international and

domestic contract drilling and aviation services. Rowan also

operates a mini-steel mill that produces heavy equipment for

the mining, timber and transportation industries and a drilling

products group that has designed or built about one-third of

all mobile offshore jack-up drilling rigs. Rowan provides

contract drilling services utilizing a fleet of self-elevating

mobile offshore drilling platforms (jack-up rigs), one mobile

offshore floating platform (semi-submersible rig) and a group

of land drilling rigs. Rowan also produces transportation,

mining and timber equipment.


Stocks in the oil service sector have been among the few bullish
issues in recent market sessions and Wednesday, Rowan posted
a fourth-quarter profit that was more than double what it earned
a year ago. The increase in revenue (to a quarterly high) was
due to rising demand for the driller's rigs and the CEO said he
believes the "momentum will continue in 2005."

Since the stock "gapped" higher on Friday morning, the put option
premiums are a bit smaller than we need for a viable position. But,
any pull-back in the issue should provide a favorable entry point,
so we are going to target-shoot $0.30 as the initial credit for the
FEB-$25 put and hope RDC's share value cooperates in Monday's
session.

Fundamentals: http://finance.yahoo.com/q/ks?s=RDC&quicken=2

Chart: http://finance.yahoo.com/q/bc?s=RDC&t=6m

Sell Put FEB 25.00 RDC-NE
Current Bid = $0.25 Open Interest = 3576
Potential Profit (5 contracts) = $125
Return on Investment (max) = 3.3%
Cost Basis in Stock = $24.75
Days to Expiration = 27

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