Given the terrible oil spill in the Gulf of Mexico, investors may wonder what this means for offshore drilling going forward, especially for the companies that help find and drill for new reserves.
Like Core Labs. Cramer recommended this high-tech oil-service play back on Feb. 9 because CLB had boosted its dividend, a typical sign of strength. Now, even though the sector has pulled back because of the spill, Core Labs is still up more than 20%. In fact, this company has offered the best 10-year, five-year and three-year annualized total shareholder returns in the oil-service industry.
But Cramer wanted to know if that outperformance would continue considering what’s happened in the Gulf. He thinks there’s little doubt the market has overreacted, bringing down certain stocks – those with little or no exposure to the problems we keep hearing about – and providing investors with some great opportunities. Could Core Labs be one of them?
Chairman and CEO Dave Demshur told Mad Money today the spill has had “absolutely no impact” on the company, that 70% of revenues come from outside North America.
“This has not had an effect,” Demshur said, “nor do we believe it will have an effect long term on Core Lab revenues and profitability.”
That’s obviously good news for CLB investors, and it seems to show that the stock’s decline has been largely undeserved. But watch Cramer’s interview with the CEO for the full story.
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