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Schlumberger Ltd. (SLB) is a stock I've had on my radar screen for a while -- it was first written about on May 6, 2009. at a price of $56.09 -- and I still like it. Here's why: Long-term, Schlumberger "is in the catbird seat," concerning the world's need for more oil. Oil producers, particularly newer clients in emerging markets, will need the more-sophisticated oil services that SLB can provide. Further, a likely oil price of $70-85 per barrel in 2010 will increase oil producer confidence in the feasibility of launching new upstream projects -- another plus for SLB.
The First Call FY2010/FY2011 EPS estimates for SLB are $2.91 to $3.83. Each EPS estimate looks a tad low, according to my analysis.
Technically, Schlumberger's stock has corrected roughly in-sync with the Dow's late January/early February pull-back, but its long-term uptrend remains intact. However, the stock features above-average volatility. Hence, if you're not comfortable with $5-7 stock price moves in a week, don't buy SLB. But if you are, according to my analysis, you'll be in the chips if you consider SLB here, as it is attractive at these levels, $60-65.
2010 Outlook: I view Schlumberger as a long-term play, but if investors are looking to sell SLB within the year, it's probably best to take your profits after it rises to $72-75, if it fails to rise above $76.
Stock Analysis: I consider Schlumberger Ltd. to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 25% position in SLB now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, I wouldn't buy more than 75% of my SLB position before April 2010 and I'd put a sell/stop loss at: $27.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
Technically, Schlumberger's stock has corrected roughly in-sync with the Dow's late January/early February pull-back, but its long-term uptrend remains intact. However, the stock features above-average volatility. Hence, if you're not comfortable with $5-7 stock price moves in a week, don't buy SLB. But if you are, according to my analysis, you'll be in the chips if you consider SLB here, as it is attractive at these levels, $60-65.
2010 Outlook: I view Schlumberger as a long-term play, but if investors are looking to sell SLB within the year, it's probably best to take your profits after it rises to $72-75, if it fails to rise above $76.
Stock Analysis: I consider Schlumberger Ltd. to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 25% position in SLB now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, I wouldn't buy more than 75% of my SLB position before April 2010 and I'd put a sell/stop loss at: $27.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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