Billionaire Paul Singer’s 10 Stock Picks with Huge Upside Potential

2. Seadrill Ltd. (NYSE:SDRL)

Elliott Management’s Stake: $144.19 million

Number of Hedge Fund Holders: 42

Average Upside Potential as of May 8: 66.08%

Seadrill Ltd. (NYSE:SDRL) provides offshore drilling services to the oil & gas industry worldwide. It owns and operates drill ships and semi-submersible rigs for operations in shallow and ultra-deep water in benign and harsh environments. It serves oil super-majors, state-owned national oil companies, and independent oil and gas companies.

The company reported a $1.3 billion contracted backlog in 2024, which saw a net increase of $700 million during the year. This backlog provides revenue visibility, which extends through 2028 and into 2029, with ~90% of the midpoint of the 2025 revenue guidance already secured within this backlog. This revenue guidance is between $1.3 and $1.36 billion. According to the CEO, Seadrill is positioned to navigate market volatility due to a strong balance sheet and durable backlog.

Seadrill Ltd. (NYSE:SDRL) secured two significant long-term contract awards in Brazil in December 2024 as well, which are to commence in 2026. These added $1 billion to the company’s backlog and included a mobilization fee exceeding $70 million. These awards for the West Jupiter and the West Telus are for 3-year terms each with Petrobras.

Patient Capital Opportunity Equity Strategy is positive on the company and stated the following regarding Seadrill Limited (NYSE:SDRL) in its Q1 2025 investor letter:

“Seadrill Limited (NYSE:SDRL) is the fourth largest pure play deepwater drilling specialist. The company emerged from bankruptcy in February 2022 with a net cash position and is positioned to benefit from limited supply and increasing demand in the deepwater drilling rig market. Nearly half of all deepwater drilling rigs worldwide were scrapped during the last decade, while industry consolidation has created a more rational competitive landscape than we’ve seen historically. Although oil demand has remained reasonably healthy, surprisingly strong onshore production from the USA, Canada and Russia has helped keep a lid on prices. While this has negatively impacted contract rates near-term, we believe that long-term future shale supply growth will be limited, and more offshore supply will be required benefitting offshore drillers. Given its highly specialized rig fleet and minimal debt, we believe the company is well positioned to benefit from improving prices when demand rebounds. We believe Seadrill could either lead industry consolidation or become an acquisition target.”