10 Most Undervalued Large Cap Stocks To Invest In

7. Schlumberger (NYSE:SLB)

Forward Price-to-Earnings Ratio: 11.11

Number of Hedge Fund Holders: 67

Schlumberger (NYSE:SLB) supplies the petroleum industry with services such as seismic data processing, formation evaluation, well testing and directional drilling, well cementing and stimulation, artificial lift, well completions, flow assurance and consulting, and software and information management. Its services are essential for oil and gas companies to discover, develop, and produce hydrocarbons efficiently and safely.

Many big oil companies like Petrobras and Saudi Aramco are its customers, which makes them strong. However, this can be affected if oil production slows down, which happened earlier this year because of China’s weak economy. It still has a lot of cash and generated $4.3 billion in free cash flow in the past year. In Q2 2024, the company made $9.14 billion in the second quarter, recording a year-over-year revenue growth of 12.84%.

It’s been using AI to make important discoveries in the energy sector. It recently launched Lumi, a new AI platform that helps energy companies work together and make better decisions by using high-quality data. It also partnered with NVIDIA to create new AI solutions specifically for the energy sector to add to its existing platforms.

It’s a good stock to buy because of the company’s partnerships with big companies. On September 18, it partnered with Aramco to reduce greenhouse gas emissions in the industrial sector. Schlumberger (NYSE:SLB) is a strong investment choice in the oilfield services sector. Despite some headwinds, the company’s long-term performance has significantly outpaced the market, demonstrating its resilience and ability to capitalize on industry trends. With its focus on international and offshore markets, it is well-positioned to benefit from ongoing capacity expansion projects and increasing demand for oilfield services.

Alger Spectra Fund stated the following regarding Schlumberger Limited (NYSE:SLB) in its fourth quarter 2023 investor letter:

“Schlumberger Limited (NYSE:SLB) provides technology for reservoir characterization, drilling, production, and processing to the oil and gas industry. During the quarter, the company reported fiscal third quarter operating results that were slightly above consensus estimates, driven by growth in international markets, namely Saudi Arabia, Kuwait, and Egypt. However, shares detracted from performance as declining oil prices weighed on the stock throughout the quarter, along with concerns around a lower North America rig count.”