(Oil) Drilling For a Better Portfolio
Oil companies are making historic fortunes these days, but without the oil services companies, they can't sell a drop. So which oil services companies can pump the biggest returns for investors?
Gerald Jordan manages the five-star Jordan Opportunity Fund. He acknowledges that shares of oil services companies have already posted sizable gains -- but expects stock prices to be sustained by continued high oil prices.
Robert Mackenzie, senior research analyst at FBR Capital Markets, is also convinced that prices will stay high. "We're seeing a surge in demand all around the world," he told CNBC.
Those shares could be hurt by a plunge in the price of oil, but neither Jordan nor Mackenzie expects that price to fall very far.
Jordan likes Schlumberger.
"The largest oil-services company in the world," he said. "They've been held back by the North American business; we believe that's bottomed, and the second half will be stronger for them."
He also likes Weatherford International, which he describes as "a sort of mini-Schlumberger."
"It's growing faster than Schlumberger, trading at a slight discount to Schlumberger," he said.
Mackenzie thinks there's a lot of potential in the small-cap names in the industry.
"One of my top picks is FMC Technologies ," he said. "They are the industry leader in subsidy equipment and wellheads for producing in deep water."
Mackenzie also recommends Tesco Corporation.
Mackenzie's firm acts as a market maker for Tesco's securities.