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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Ms. X who wrote (14065)	3/7/1998 3:01:00 PM
From: Teddy	Read Replies (2) \| Respond to of 95453

RE: any info on SLB? Jan, Jan, Jan, couldn't you have asked for info on a more simple company like ALD or 3M?<G> I mean SLoB is into a lot of stuff and (for me a least) trying to figure this company out is like trying to find a good mutual fund. Anyway, I owe you more than a few days labor (and it is raining), so I tried to find some dirt on old Schlumbmister: can't find anything "wrong" with the company, but I have a few ideas why it might under perform the OSX. (This is mostly my ideas and FA stuff, you can read the chart for yourself<g>) 1. Halliburton's (HAL) announcement that it will acquire Dresser Industries (DI) will make it the world's largest oilfield-services company, passing the SLoB. The company is now less prestigious and faces competition for the "one stop center for all your exploration needs." 2. There is significant amount of talk about consolidation opportunities within the oilfield sector. SLoB, if anything, would be buying other companies. At this time people would be more likely to buy stock in companies that they think are going to be bought out. 3. SLoB has exposure outside of oil service: Schlumberger Electronic Transactions is a business segment of Schlumberger Ltd. They are into wicked cool stuff like Java-based smart cards. Schlumberger's Measurement & Systems unit makes products such as utility meters, automatic testing equipment for the semiconductor industry, fuel-dispensing systems for gas stations, point-of-sale payment systems, and parking management systems. Schlumberger has a joint venture with Cable & Wireless PLC to provide information technology such as Internet communications to energy-industry customers. I'm not saying that this is bad (it might be good), just that if MoMo wants to play drilling or field service SLB would not be the first choice. 4. SLoB is in the S&P 500. Institutional Holdings were about 65% with 1,489 institutions owning the stock (data is over one month old). Maybe they will buy a few more shares... maybe they will sell several million. Your guess is as good as mine, but I'd hate to have my sell order hit the floor right after someone dumped a million share block. 5. Earnings have increased Q over Q, but not a great rate (they missed consensus last Q): 3/29/96 6/28/96 9/30/95 12/30/96 .35 .40 .47 .52 3/31/97 6/30/97 9/30/97 12/31/97 .53 .62 .72 .75 6. They are so big that even "big" contracts add little to EPS. Smaller companies react faster to news. Well, that's my 6 worst thoughts (that is what you wanted, right?). I could also think of 6 good reasons to buy it. So, I don't think there is anything "wrong" with it. It would be a good stock for my grandmother. For me, I'll take a little more risk in hope of a higher return. Maybe for a better return you could buy slightly in the money calls in few months out (I'm just learning that stuff and am not allowed to do it yet). Have a nice day at the beach ;-) Monday should be... err.. interesting. (Mavis, do you have anything to add to this?)