The Rising Influence of Rising Affluence

[DewDiligence]

Morningstar gushes about CLB:

http://news.morningstar.com/articlenet/article.aspx

Core Laboratories (CLB) operates under a simple premise: The better that oil companies understand their reservoirs, the more oil they will ultimately produce. Core facilitates better understanding by providing the descriptive analysis of the geological and fluid characteristics of reservoirs to increase production both in the immediate term and over the life of the asset. Core's services are unique and highly valuable--the firm generates the highest returns on invested capital in the oil services industry and shows no signs of slowing down.

No argument about CLB’s stellar return on capital; however, the uniqueness of what CLB does (or the lack thereof) has been broached in prior threads on this board.

Understanding a reservoir involves three components: the qualities of the rock, how the fluids (oil, natural gas, and water) will flow through the rock over time, and how to prevent or mitigate damage to the reservoir, which could impair recovery. Core provides services for all three, on a piecemeal as well as an integrated solution basis. It is the only independent service company in the world to offer many of these services globally (although some of the international oil companies do comparable work internally), and its accumulated knowledge and capabilities have served as a substantial barrier to competition.

Again, this has been the subject of debate on this board.

We believe Core's [competitive] moat is as wide as they come.

Ditto the comment above. All told, CLB is clearly a great oil-services company, and I’ve made good money by owning it. However, the greatness of the company’s business model is largely or fully reflected in the valuation, IMO. Comments welcome.

p.s. CLB set an all-time high today. It is up 10-fold from its 2009 low (split-adjusted).