Energy sector investors have learned to expect that a handful of stocks never get that cheap, and specialized service provider
Core Laboratories (NYSE:
CLB)
is definitely one of them. Unlike many energy service companies, Core
Labs has a surprisingly consistent record of not only positive
free cash flow, but free cash flow growth coupled with double-digit
returns on invested capital. While rivals such as
Schlumberger (NYSE:
SLB)
are trying to capture some of Core Labs' business, its strong
competitive position seems very much intact. The real question for
investors is whether they can get comfortable paying nearly twice the
normal premium for a services company.
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