1. Schlumberger Limited. (NYSE:SLB)
52 Week Range: $42.61 – $62.12
Current Share Price: $42.49
Market Capitalization as of September 3: $32.98 Billion
Number of Hedge Fund Holders: 67
Schlumberger Limited (NYSE:SLB) is one of the best beaten-down stocks for diversifying an investment portfolio in the energy sector. The company provides technology for the energy industry, focusing on Digital & Integration, Reservoir Performance, Well Construction, and Production Systems.
The company’s competitive edge stems from its robust clientele base, including major global oil corporations, Petrobras and Saudi Aramco. Additionally, the company is well positioned to benefit from oil majors ramping up production on economic growth, receiving a boost from lower interest rates.
Additionally, Schlumberger Limited (NYSE:SLB) is seeing a strong resurgence of activity in the oil and gas business driven by long-cycle development and capacity expansion projects. Oil prices finding support above $75 a barrel is positive for the oilfield services industry, for which the company is one of the big players.
The major player in oilfield services reported adjusted earnings per share (EPS) of $0.85, better than the consensus estimate of $0.83. The company’s quarterly revenues surpassed expectations, reaching $9.14 billion, surpassing the $9.08 billion predicted.
The company’s revenue saw a 5% increase from the previous quarter and a 13% growth compared to the year before, showing substantial expansion in an improving market. This growth was due to a wide range of international earnings and increased margins across all its divisions.
Schlumberger Limited (NYSE:SLB) is poised to continue experiencing steady growth in overseas markets, robust online sales, and cost reduction initiatives. This will support additional margin growth and help achieve its goal of increasing full-year adjusted EBITDA in the mid-teens.
With the stock trading at a price-to-earnings multiple of 14 and close to its 52-week lows, it remains one of the best beaten-down stocks to invest in, especially for its 2.50% dividend yield. As of the end of the second quarter of 2024, 67 hedge funds tracked by Insider Monkey Database held stakes in the company.
Here is what Artisan Value Fund said about Schlumberger Limited (NYSE:SLB) in its fourth quarter 2023 investor letter:
“On the downside in Q4, our two energy holdings, Schlumberger Limited (NYSE:SLB), the world’s largest oil services company, and E.O.G. Resources, a U.S. shale-focused E&P company, were weak along with the broader sector. We have stringent criteria for business quality, which is particularly important in commodities sectors as these businesses do not control the underlying commodity prices, which can be volatile. We expect Schlumberger to continue to successfully navigate market volatility and deliver on its free cash flow and profit margin growth objectives from combination of activity growth and pricing gains. The stock has been among our top contributors since we initiated our position in December 2020.”
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