Core Laboratories CLB an excellent entry point from a Long-Term Investment perspective…

By | October 22, 2014


Continued…

As of writing this CLB a Dutch Oil services company is trading around $145.90 it has a good moat in the industry, with a well-diversified business model. Core Laboratories has an excellent management, that has placed the company favorably for investors seeking long term growth. The stock is down nearly 30% from its all time high thus making an attractive entry point.

While researching CLB I stumbled on an excellent article seeking alpha ran on 22 September in case if you are interested it’s here. Over the last couple of months CFO Richard Bergmark is in the news for insider buying, perhaps it is because the company’s price has recently fallen from a historical high of $200.00.

So a quick look at the events of CLB is pretty bright from a long term investor’s perspective. But since it has fallen from high of around $200 to $136 in a span of six months, I have apprehensions that there might be more to it other than falling oil price, and the slowing down of their client’s projects thus making cut backs in the future exploration projects.

Well I think I have to do me more research on them to be completely confident of their uniqueness of the business they are in. But since they are still trading at a trailing PE of 24 despite the delayed orders from the Gulf of Mexico it’s a BUY for me.

I understand that they are a bit expensive but that is due to the less cyclical nature of the business and to the far stronger market position than most. This further reinforces my belief that their services have been in consistent demand and they have the economies of scale to improve margins.

They are reporting their next quarter today any positive changes to the guidance could make the shares even dearer. What else do you need to know in making a decision?

It’s like putting your money in a company that sells data and services, whose margins seem to be consistently climbing in the past decade or so, and that’s an indication of a strong business.

Perhaps you need to understand more about the business as it’s your money and it must be your call?

If you have any of your own thoughts on CLB do let know through the little comment box below.

Disclosure: I don’t have any positions in any stocks mentioned herein, and no plans to initiate any in the near future as well.

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