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Schlumberger fits into every part of the oil service business, but Cramer likes that it gets 80 percent of its sales from outside of the United States. In other words, it has less exposure to the weak natural gas business, unlike some of its competitors. It has a 60 percent market share in the lucrative deepwater drilling services business.
As oil companies continue to ramp up production, Cramer thinks Schlumberger could see earnings growth of 30 percent next year. With the stock currently selling at 14 times next year’s earnings estimates, Cramer thinks SLB is a “steal” at current levels.
EOG Resources: EOG Resources is “one of the most undervalued oil companies on Earth,” Cramer said. It was the top producer in the U.S.’s two largest domestic reserves: the Bakken shale in North Dakota and the Eagle Ford shale in Texas. Cramer thinks EOG’s Eagle Ford properties are worth more than the price of the whole company.
Not only is EOG one of the largest oil and natural gas companies in the U.S., it also has proven reserves in the Canada, China, Trinidad and the U.K.
National Oilwell Varco: For investors who can stomach risk, Cramer points to National Oilwell Varco. The Houston-based company is the leading maker of oil rigs, as well as associated drilling and production equipment. It enjoys a 70 percent market share in this area.
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