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Core Laboratories N.V.

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We like Core Labs’ leadership position in the reservoir optimization niche, along with its global footprint and deep portfolio of proprietary products and services. Furthermore, low asset intensive operations and limited capex needs of the company allow it to generate substantial free cash flows. It is to be noted that crude currently has a healthy pricing environment as the commodity has recovered significantly from its record lows in mid-February. Since oil has entered into the bullish territory, the exploration and production players might start investing in the oil patch that will directly lead to increased oilfield services. Despite all the positives, the company expects third quarter earnings and revenues to decline. As such, we expect Core Labs to perform in line with the broader market.

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