Schlumberger NV (SLB): Today's Featured Basic Materials Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Schlumberger ( SLB) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day down 1.7%. By the end of trading, Schlumberger fell $1.38 (-2%) to $68.77 on average volume. Throughout the day, 6.2 million shares of Schlumberger exchanged hands as compared to its average daily volume of 5.8 million shares. The stock ranged in price between $68.59-$70.85 after having opened the day at $70.60 as compared to the previous trading day's close of $70.15. Other companies within the Basic Materials sector that declined today were: Prospect Global Resources ( PGRX), down 11.3%, James River Coal Company ( JRCC), down 9.9%, GeoGlobal Resources ( GGR), down 9.4%, and Alderon Iron Ore ( AXX), down 9%.
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Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. Schlumberger has a market cap of $92.31 billion and is part of the energy industry. The company has a P/E ratio of 16.9, below the S&P 500 P/E ratio of 17.7. Shares are up 1.8% year to date as of the close of trading on Thursday. Currently there are 24 analysts that rate Schlumberger a buy, no analysts rate it a sell, and two rate it a hold.

TheStreet Ratings rates Schlumberger as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, growth in earnings per share and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

On the positive front, China Shen Zhou Mining & Resources ( SHZ), up 20.8%, US Silica Holdings ( SLCA), up 10.7%, Taseko Mines Ltd NPL ( TGB), up 10.5%, and China Gengsheng Minerals ( CHGS), up 10.4%, were all gainers within the basic materials sector with Cimarex Energy Company ( XEC) being today's featured basic materials sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).

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