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Is Noble Corp. A Buy Right Now?

Summary

Noble Corp.'s shares remain strong despite falling oil.

The dividend cut was met with enthusiasm, and the company is expected to make purchases as asset prices fall.

Is Noble a buy right now?

In my previous article on Noble Corp. (NYSE: NE) I stated that the company was high on my watch list. Since then, the company cut dividend and reported third-quarter earnings while oil prices broke their support and headed lower. Despite a number of developments, Noble's shares are roughly flat compared to where they were on October 21, when the abovementioned article was published. A sign of strength?

Dividend cut

Prior to the dividend cut, Noble's yield was extremely generous. I even called it "surreal". During the second-quarter earnings call, the company stated that dividend was important. Not more important than liquidity in the tough market environment, as the subsequent developments showed.

Contrary to what I expected, the market gave Noble a pass and its shares felt no pressure from the dividend cut. The Noble's case convinced me to develop a rule of thumb for myself. When you see a...


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