One of my favorite stocks is an energy company: Yes, I know that most energy
stocks are old news. My Blue Chip Growth Letter readers made very tidy
profits on our energy portfolio, selling into strength.
However, I still favor Schlumberger (SLB). As a deepwater oil driller,
Schlumberger has pumped up more than 85% earnings growth over the past year.
Oil prices could go up, down, or sideways—with very solid fundamentals,
Schlumberger will still prosper as long as the world runs on oil. And as the
world’s thirst for new oil sources intensifies, Schlumberger will continue to
make profits hand over fist. That 85%+ earnings growth in 2006 should rise to
225% or better by 2009. At the latest, 2011.
Three to five years for 225%+ earnings growth is as extraordinary as Chevron’s
huge deepwater discovery.
Schlumberger is one of the world’s largest oil field services companies. With
contracts all over the globe, they deliver the full range of oil and gas
services, including seismic surveys, drilling, wire line logging, well
construction and completion, as well as project management. The company has 27
geographic teams throughout the world.
Its Oilfield Services division provides reservoir evaluation, development and
management services. It’s also working to develop new technologies for reservoir
optimization, which will be more and more profitable as classic old wells pass
maturity.
Through its WesternGeco business (a 70%-owned joint-venture with Baker Hughes),
the company provides seismic services to customers worldwide. The long-term
outlook for the stock is simply outstanding.
SLB has posted a positive earnings surprise for the past nine quarters. I expect
that trend to continue. Repairs forced by Hurricanes Katrina and Rita alone will
take years. With so much drilling, exploring and repairing, everything is fine
in the oil services business.
With Chevron’s huge discovery opening up more deepwater exploration,
Schlumberger is extending and contracts with oil companies across the globe.
The long-term outlook is simply outstanding. According to their Chairman and
Chief Executive, Schlumberger’s sales growth will be in the mid to high teens
through the end of the decade. He anticipates no significant slowing of activity
before 2011.
This is a Moderately Aggressive investment. Buy under $66.
About Louis Navellier
Louis Navellier has the most exceptional long-term track record of any financial
newsletter editor in America. He has been a financial analyst and editor of
investment newsletters since 1980. Mr. Navellier’s recommendations have gained
4,804% in the last 21 years, as confirmed by the leading independent newsletter
rating service, The Hulbert Financial Digest. In comparison, the S&P 500
has gained 1,157% in the same time period.
Mr. Navellier launched the Blue Chip Growth Letter in September 1997,
with a mission to track only 600 to 800 stocks — those worth over $3 billion in
market capitalization (that’s the S&P 500, plus about 200 other large stocks
outside the S&P 500).
His stock recommendations in the Blue Chip Growth Letter have
returned over 168.4% from 1998 through the end of 2005, according
to The Hulbert Financial Digest. This return beat the overall stock
market by more than 3-to-1.
