Sanford C. Bernstein & Co.’s Scott Gruber advances to third place from runner-up. The former All-America Research Team Rising Star “produces very comprehensive and differentiated sector research,” one supporter affirms. “He is also very insightful on the drivers affecting the companies under his coverage.” Gruber believes that spending on oil services and equipment will increase at a mid-single-digit rate over the next few years, which is half the tempo of the past decade but above consensus expectations. To support this view, he points to deepwater development and the evolution of international gas activity, as the U.S. moves to displace coal with natural gas in the power sector and big countries like China and India raise their domestic pricing for natural gas. “Thematically, the big, high-quality integrated service companies offer the best value,” Gruber explains. “They’re trading at or below market multiples, and the growth prospects are better than what the consensus opinion implies — and what the valuation implies.” His preferred names are Houston-based Halliburton Co. and Schlumberger. — Carolyn Koo |
The 2013 All-America Research Team: Oil Services & Equipment, No. 3: Scott Gruber