Follow up on Core Labrotories (CLB)

Following up my mention of Core Laboratories last week, Seeking Alpha has a new bullish blog entry about CLB from Ted Allrich here.

My one disagreement with the blogger is about the price of oil affecting Core Labs too severely. While I do agree if oil drops to say sub $60 a "throw the baby out with the bath water" scenario will play out, but if oil is $80 or $60, Core Lab's services will be in need. And as crude becomes harder and harder to find and to extract, that trend will only continue. With that said, if oil does take a dip on "worldwide slowing economy" (which will happen one of these days) expect all of these names to take a fall along with the emotion of the time.

I mentioned a trio of energy related names last week that the fund is building a position in; main reason is their less cyclical nature versus traditional 'energy plays' - this is the same reason I like the deep sea drillers.

I added some last week in the $103 range, and since then the chart has shown some improvement with a series of higher highs and higher lows. While the energy sector as a whole has been in the doldrums of late, CLB has been holding up well overall. The stock is trading at $109 today and on pullbacks to the 50 day moving average I will continue to add. I would like to see something more severe (i.e. lower price) in case the market tanks, so have held off building the position further but it now encompasses 2.0% of the fund's holdings.

Long CLB in fund; no personal positions.