Jim Cramer Looked At These 7 Stocks Recently

2. Schlumberger Limited (NYSE:SLB)

Number of Hedge Fund Holders: 65

Comparing Schlumberger Limited (NYSE:SLB), the oil giant, and Halliburton, Cramer called SLB “the larger and more international of the two” and delved into SLB’s recently released earnings results.

Cramer noted that the stock rose in response to its strong fourth-quarter performance, highlighting better-than-expected results, particularly in North America. While the international segment met expectations, Latin America showed some weakness. Cramer pointed out that the vital takeaway was management’s cautious but not overly negative outlook for the future. He added:

“One analyst from JPMorgan called it better than feared and that sounds about right, at least to me. CEO Olivier Le Peuch, he noted that in the back half of 2024, his customers, meaning the oil and gas producers, ‘adopted a more cautious approach, primarily driven by concerns of an oversupplied oil market’. But then he added, ‘Although these concerns persist, we anticipate the oil supply imbalance will gradually abate’, citing global economic growth and a heightened focus of energy security coupled with rising energy demand from AI and data centers.

Yes! For this year specifically, Le Peuch said, ‘We expect global upstream investment to be steady in 2025 compared to 2024.’ For the smaller North American side of the business, he sounded less optimistic explaining that oil and gas activity is expected to decline due to lower publicly announced CapEx in U.S. land, higher drilling efficiency, and a slow recovery in gas until LNG capacity expansions are resolved. Now the stock’s still got a nice pop on these numbers and that commentary, gained 6% last Friday because the results were better than feared.”

Cramer pointed out that Schlumberger’s (NYSE:SLB) stock had dropped by 26% in 2024, and he viewed the most recent quarter as relatively neutral, particularly when it came to the North American business. While Cramer acknowledged that the company’s performance was not bad, he also felt it did not provide much in the way of optimism.

He noted that SLB had already given back most of the gains from last Friday’s rally, which he believed was reasonable given that the quarter was not awful, but it also did not offer much to get excited about. Cramer went on to say:

“Plus, while I think the oil service plays could remain challenged for a while, maybe the entire year, these stocks right now are incredibly cheap. SLB, 12 times this year’s earnings, 2.7% yield. Halliburton 10 times with a 2.4% yield. That said, it’s hard to predict when these stocks are going to bottom. Given how cheap they are though, I could count on starting a small position now as long as you prepare to go slowly, buy more on the way down, and accept that these are value plays, deep value.”