The Insiders Fund, LP on Borr Drilling Limited
Thesis
The Insiders Fund expects renewed offshore drilling demand as energy buyers try to reduce reliance on Middle Eastern hydrocarbon supplies. Borr operates jack-up rigs and has recently secured new contracts that extend its backlog into 2026 and 2027. Large insider purchases and improving cash generation strengthen the bullish interpretation of otherwise weak headline earnings. The manager emphasizes that this is a cyclical and leveraged investment whose thin 2027 contract book requires continuing positive developments.
“the backlog is growing, and the cash generation is better than the ugly headline loss suggests.”
Key risks
- A thin 2027 contract book
- Double-digit short interest
- Leverage and exposure to cyclical offshore capital expenditure
- New contracts and demand recovery may not be sufficient to support sustained appreciation