There’s no mistaking the value and ability of Ford Motor Company (NYSE:F)’s management; its decisions have resulted in a drastic improvement of operating efficiencies, financials, and quality of vehicles that people now demand. It’s reduced union contracts and vehicle costs, paid down massive debt and doubled its dividend. While the turnaround is complete, I highly doubt Ford has seen its brightest day – much to the delight of investors.
Next up: Core Laboratories
I bought into Core Laboratories N.V. (NYSE:CLB) right at the beginning of the year when the stock hovered at $105. The reason I finally made the plunge was because for once it wasn’t trading at a premium. This stock is loved by many and usually trades at a high P/E ratio. When it took the rare dip, I pounced on it! Since then, it’s jumped to $135 in three months and I’m going to let this great company be a foundation in my portfolio for a long time. Here are a couple reasons this stock is still worth buying.
Demand for oil is still strong; now that it’s more expensive to extract black gold from the ground, companies are willing to pay Core Laboratories N.V. (NYSE:CLB) for key information on dig sites. Gone are the days where oil companies would randomly dig into the ground and find a wealth of oil. The company analyzes and tests rocks and dig sites to determine how to get the most oil out of the ground, as cheaply as possible. Without this information and expertise, oil companies risk digging too deep or using new technology at a location without enough oil to keep margins high. That’s a risk most aren’t willing to take.
Demand for Core Laboratories N.V. (NYSE:CLB) should remain strong. It’s a very clean and strong company financially that has a great return on investments. A remarkable 17% of revenue turns into free cash flow. What’s more, the company uses that cash in ways that are valuable to shareholders. It pays dividends, and has reduced its share count by more than 3% annually over the last eight years from buybacks. This company offers an intriguing play in the energy sector, with 80% of its business mix in oil and 20% in natural gas. Both fuels will play a key role in the U.S. and internationally for the distant future, and Core Labs will be there to benefit.
Bottom line
Some investors are becoming hesitant to put money into the market after it hit its record high. While I understand this hesitation, I believe these two stocks are still very good buys. If you want to invest now, do serious homework and find undervalued companies with proven management in booming industries. Ford Motor Company (NYSE:F) offers that option exactly. Don’t take it from me: Morningstar recently upped Ford’s fair value to $21, showing there’s plenty of upside left in this stock. While Core Laboratories N.V. (NYSE:CLB) isn’t cheap – it rarely is – it offers a great way to profit from a boom in natural gas and oil. If nothing else, be sure to follow it and take advantage of any rare dip in price.
The article My 2 Top Stocks: Ford and Core Laboratories originally appeared on Fool.com.
Fool contributor Daniel Miller owns shares of Ford and Core Laboratories N.V. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford.
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