Out Fox The $treet

The Department of Justice approval sets Schlumberger up for completing the Cameron merger on time. The deal remains on path to provide a boost to Schlumberger's EPS estimates. A big concern remains that the market won't appreciate the lower margins from the Cameron business. The recommendation remains to hold off on owing this stock until after the company releases the merged financials. The recent approval of Schlumberger 's (NYSE: SLB ) purchase of Cameron (NYSE: CAM ) sets up the deal to close in Q1'16. The oilfield service giant faced limited regulatory impact from buying the Cameron business that has little overlap. Read the full article on Seeking Alpha. Disclosure: Long HAL. Please review the disclaimer page for more details. 

Schlumberger paid a hefty premium for the low-margin business of Cameron. A promising business combination isn't always financially rewarding to shareholders. The recommendation is to stay away from Schlumberger until the merger integration starts achieving synergies by late 2016. One of the most overlooked aspects of corporate combinations is the psychological impacts on stock multiples. A merger might be accretive to the acquirer, but if the combination reduces the growth rate or margins going forward, it could impact the valuation multiple assigned the stock. A stock that currently holds a premium multiple might suddenly lose that valuation due to lower growth rates going forward or less impressive margins. Read the full article on Seeking Alpha. Disclosure: Long HAL. Please review the disclaimer page for more details. 

Summary Schlumberger generated substantial earnings growth despite severe weather. North America revenue saw a sequential increase. Oil services stocks sit near all-time highs. While the oil services firms had every excuse to turn in a weak first quarter, the initial results were very solid. Baker Hughes ( BHI ) solidly beat analyst expectations and Schlumberger ( SLB ) squeaked out a small beat. Read the full article at Seeking Alpha. Disclosure: Long HAL. Please review the disclaimer page for more details.