The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.By Tim Begany NEW YORK ( StreetAuthority) -- If I had to describe the stock market in two words, then I'd pick "shortsighted" and "skittish." A brief hiccup in revenue growth, a discouraging word from management about quarterly earnings or even a bit of bad press can sometimes trigger a significant selloff.
Resource-laden Russia is just one example. Schlumberger is No. 1 in that country's $15 billion oilfield services industry, with a 12% market share, and the industry is projected to triple in size by the end of 2017. Schlumberger is well-positioned to participate in this growth because it's close with many Russian national energy companies, so it's typically a front-runner in the race for the most lucrative contracts. Schlumberger has similar situations in other fast-growing countries, too, like Mexico and Brazil. To help keep its leadership position, Schlumberger stays on the cutting edge of technology and has developed a reputation for highly successful R&D. The company's proprietary "Q" technology, for example, was a major advance in high-precision seismic survey equipment when it was introduced more than a decade ago, and it's still top-of-the line today. Schlumberger introduced its HiWAY hydrofracking technology in July 2010, which improves well productivity by 53% while using less water and proppant (sand, gravel or other materials used to create and hold open factures in shale deposits where oil or gas is trapped). HiWAY is quickly becoming a hydrofracking method of choice domestically and abroad. Despite all the economic troubles of the past three or four years and the recent disruption in Schlumberger's North American operations, earnings have grown rapidly, rising 23% annually for the past five years. Analysts project earnings will keep growing at a very nice 15% rate, rising from $3.51 to $7.06 a share by early 2017. Based on this, I think shares of Schlumberger could double in price to around $140 in the next five years, because investors have historically been willing to pay about a price-to-earnings ratio of about 20. ($7.06 X 20 = $141.20). Risks to Consider: Low natural gas prices are the main concern right now, and the situation would only worsen if prices fell more, especially if natural gas dragged oil down with it. This would further dampen drilling activity and hurt demand for Schlumberger's services. Action to Take: If the economy was like last year, then I'd be a lot more concerned about the possibility of falling energy prices and the effect they would have on Schlumberger's performance. But because the economy is improving, albeit slowly and unevenly, I think the growth scenario I've described here is much more likely. Investors who are interested in Schlumberger should consider buying now. At 27% below the one-year high and 37% below the five-year high, the stock looks reasonably priced. Tim Begany does not personally hold positions in any securities mentioned in this article. StreetAuthority LLC does not hold positions in any securities mentioned in this article.