For the bulls in the energy sector, it must seem like sweet revenge. When the price of oil hovered in the mid $20s in January of 2016, some of the bears on Wall Street said the selling wasn’t close to over, and it was going even lower. This week oil hit the highest levels in over three years, and many now think it could break through the $70 a barrel mark.

The good news for investors is that, while oil prices have exploded, some of the stocks are still reasonable.

A new Merrill Lynch research report previews first-quarter earnings for the top oil service stocks in their coverage universe, and while the results could be lumpy, due to weather and rail logistics issues, the firm is very positive for the rest of 2018 and noted this:

Cost inflation and rail issues should be key topics on conference calls, along with customer sentiment and the international market outlook. Given recent stability in oil prices and Saudi comments suggesting it would support a price near $80, we will be curious to hear if exploration and production companies back off of rig addition “discipline.”

We screened the oilfield services coverage list for stocks rated Buy and found four that look like outstanding Buys at current levels.

Baker Hughes

Final approval for the merger of the Baker Hughes and General Electric was completed last year, and this is the new entity. Baker Hughes, a GE Company (NYSE: BHGE) is a provider of integrated oilfield products, services and digital solutions. The company’s products and services include upstream, midstream, downstream, industrial and digital.

Baker Hughes upstream business includes evaluation, drilling, completions and production. Midstream enables the power and compression efficiency for liquefied natural gas pipeline and storage. Downstream builds reliability and safety into process operations that include refining and petrochemical and fertilizer solutions.

The company’s industrial solutions unit offers power generation to advanced control systems and sensing technology that power industrial facilities. Digital transformation integrates data on an open platform with security and scale. The digital transformation enables field services with real-time insights.

The analyst turned positive on the shares earlier in April and raised the rating on the stock to Buy with a $36 price target. The Wall Street consensus price target is $35.74, and the stock closed trading on Thursday at $33.71 per share.

Schlumberger

This top oil services company is expected to benefit from increased exploration and production spending, and it is also a member of the Merrill Lynch US 1 list. Schlumberger Ltd. (NYSE: SLB) is the world’s largest provider of services and equipment used in drilling, evaluation, completion, production and maintenance of oil and natural gas wells. Revenues in 2017 totaled $30.4 billion, and EBITDA was $6.9 billion.

The company operates in the oilfield service markets through three groups: Reservoir Characterization, Drilling and Production. Reservoir Characterization Group consists of the principal technologies involved in finding and defining hydrocarbon resources. These include WesternGeco, Wireline, Testing Services and Schlumberger Information Solutions.

The company reported solid first-quarter results Friday morning, and produced net income of $525 million, or 38 cents a share, in the first quarter, after a loss of $2.255 billion, or $1.63 a share, in the year-earlier period.

Schlumberger shareholders are paid a solid 2.85% dividend. Merrill Lynch has a $75 price objective on the stock, but the posted consensus target is higher at $81.17. The shares ended trading on Thursday at $70.28 apiece, but they were down some in Friday’s premarket action.

Patterson-UTI Energy

This remains a top oil services pick across Wall Street. Patterson-UTI Energy Inc. (NASDAQ: PTEN) is the second-largest land driller in North America and a large pressure pumping provider. Its operations are particularly focused in the Marcellus and in Texas.

Patterson-UTI and its subsidiaries operate land-based drilling rigs in oil and natural gas producing regions of the continental United States and western Canada. Universal Pressure Pumping and Universal Well Services provide pressure pumping services primarily in Texas and the Appalachian region. For the three months ended September 30, 2017, the company had an average of 161 drilling rigs operating.

The company remains the fifth largest Pressure Pumper with a 1.5 million HHP frac fleet (currently 83% utilized) with exposure to ancillary rental equipment business through Great Plains Oilfield Rental. The recent acquisition of MS Energy (directional drilling) complements its contract drilling business and provides attractive growth opportunities for investors.

Investors in Patterson-UTI are paid a small 0.4% dividend. The $27 Merrill Lynch price target compares with a consensus price objective last seen at $24.85. The shares closed at $20.30 on Thursday.

Nabors Industries

This company provides drilling and rig services, and some feel it could be a takeover target. Nabors Industries Ltd (NYSE: NBR) owns and operates the largest land-based drilling rig fleet in the world, and it is a leading provider of offshore platform workover and drilling rigs in the United States and select international markets. Revenues in 2016 were $2.23 billion.

Nabors markets approximately 400 rigs for land-based drilling operations in the United States, Canada and approximately 20 other countries worldwide, and 41 rigs for offshore drilling operations in the United States and internationally.

While the stock has rallied off the lows, Nabors is still down over 50% from highest levels posted a year ago. This concern has been exacerbated recently by a softer-than-expected third-quarter earnings report and focus on 2018 non–cash deferred revenues. While most don’t see a quick fix for the company, the worst surely looks to be over.

Nabors investors receive a 3.07% dividend, though that may be lowered going forward. Merrill Lynch has set its price target at $10. The posted consensus price objective is $9.19, and the shares closed well below those levels most recently at $7.82 apiece.

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These are four stocks to buy for big potential gains the rest of 2018. They run the risk gamut, so investors need to gauge their capital investment to their risk tolerance. One thing is for sure, the sector offers far more value than many others and makes sense to buy now as oil heads towards the $70 level.

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