5 Best Crude Oil Stocks To Buy As Tensions Rise

3. Schlumberger Limited (NYSE:SLB)

Number of Hedge Fund Holders: 67

Schlumberger Limited (NYSE:SLB) is a Texas-based company that provides oilfield services and equipment. It is the largest offshore drilling company in the world by revenue. The company was founded in 1926 and operates globally.

On January 30, HSBC analyst Abhishek Kumar reiterated a Buy rating on Schlumberger Limited (NYSE:SLB)’s stock and raised the price target to $75 from $56.8. The analyst raised his price target due to the company’s strong international growth in the fourth quarter and believes that the service sector is gaining momentum. Schlumberger Limited (NYSE:SLB), being the world’s largest oil and gas services company, is expected to benefit the most from it.

According to the Insider Monkey database, 67 hedge funds held bullish positions on Schlumberger Limited (NYSE:SLB) in the fourth quarter of 2022 with a combined value of $4.66 billion, compared to 63 hedge funds with shares of around $2.44 billion in the previous quarter. The most prominent position in Schlumberger Limited (NYSE:SLB) in the fourth quarter was held by First Eagle Investment Management with 27.5 million shares worth $1.47 billion.

Artisan Partners made the following comment about Schlumberger Limited (NYSE:SLB) in its Q4 2022 investor letter:

“Our top Q4 contributor was Schlumberger Limited (NYSE:SLB), the world’s largest oil services company. Shares of SLB rallied along with the broader energy complex, as structural global supply issues have supported rising commodity prices following years of underinvestment in new production. SLB is performing well in a competitive marketplace. The new management team is conservative, forward thinking and executing a good strategic plan to make the company less dependent upon commodity prices and capex. Management has driven the company’s refocused efforts to increase free cash flow and expand profit margins, a task made easier with the cooperating price of oil. We also like that the business model is becoming nimbler and more adaptive to market forces, as evidenced by its recent focus on contributing to the production of cleaner energy. No single customer is more than 10% of revenue, with global exposure very diversified across basins, customers and capital spending exposure. Additionally, in contrast to much of the energy sector, SLB has consistently generated positive free cash flow. Despite solid price appreciation, the stock remains attractively priced based on our estimates of normalized EPS.”