STOCK PICKS: Top 5 Large-Caps for July 9

We have rated Smith a buy since May 2006. Various strengths, such as growth in net income and revenue, contributed to this rating. For the first quarter of fiscal 2008, the company's earnings grew 9.3% year-over-year, propelled by improved earnings from the Oilfield segment. Net income was $174.99 million, or 87 cents per share, compared to $160.16 million, or 80 cents per share, in the first quarter of fiscal 2007. Revenue for the first quarter grew 12.5% year-over-year to $2.37 billion due to a rise in the Oilfield segment's business volumes. A quarterly dividend of 12 cents per share was paid in April 2008, representing a 20% increase in Smith's quarterly dividend.

Management believes that customers and shareholders will see significant value from an upcoming 50/50 joint venture with Integra Group to supply downhole oilfield services and engineering solutions in Russia and other countries of the Commonwealth of Independent States. The joint venture is expected to close during the third quarter of fiscal 2008. Additionally, management is encouraged by the strength shown by the non-North American market and therefore expects earnings for fiscal 2008 to be in the range of $3.70 to $3.80 per share. However, Smith's future performance is dependent on the level of oil and natural gas exploration and development activities, and could be negatively impacted by disruptions in global business and economic conditions.

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Diamond Offshore Drilling(DO Quote) engages in the contract drilling of oil and gas wells. The company's fleet of 30 submersibles enables it to offer a range of services in various markets worldwide, including the deep water, harsh environment, and conventional semisubmersible markets. Diamond also owns 13 jack-up rigs, which are mobile, self-elevating drilling platforms equipped with legs that are lowered to the ocean floor until a foundation can be built to support the platform. Finally, Diamond also has one drillship, the Ocean Clipper, located offshore Brazil.