Written by Robert Swift
Investors adore narratives that offer emotional comfort. “AI will save us”, “recession is cancelled”, “central banks have everything under control”, and other fairytales that make market commentators feel clever. The inconvenient truth is that markets rarely deliver the outcomes that dominate headlines. Instead, the real drivers of return tend to come from slow, structural shifts that most people ignore because they lack the excitement of the latest bubble.
Three such shifts are now underway. Energy investment is rising again after a decade of starvation. Japanese financial conditions are normalising after thirty years of distortion. And the global manufacturing base that will power the AI boom is moving into a more rational, more profitable phase. None of this fits neatly into the noise that occupies most financial media, but all of it matters if you want to make money rather than simply participate in debates about the Federal Reserve or the ten stocks that dominate the Nasdaq.
Today we examine three companies that exemplify these turning cycles: Schlumberger in global energy services, Mizuho Financial Group in Japanese banking, and Jabil in advanced manufacturing for AI and infrastructure. They are large, liquid, profitable, and still reasonably valued. More importantly, they are priced for the world that existed five years ago, not the world that is emerging now.
Investing is not about predicting the next headline. It is about positioning yourself where capital is starting to flow, not where it has already arrived. The following companies sit precisely at that inflection point.
Schlumberger: The Unfashionable Energy Giant That Never Went Away
You would not know it from the behaviour of climate aspirants on social media, but the world still relies on oil and gas for the vast majority of its energy needs. Not because we lack the technology for alternatives, but because reality does not bend to ideology. It takes decades to transform energy systems. Politicians and some asset managers may pretend otherwise, but companies like Schlumberger operate in the real world, where physics and engineering still matter.
Schlumberger, the largest technology and services provider to the energy sector, has been quietly compounding value as the world wakes up to its multi year underinvestment in supply. The company’s revenue profile tells the story. Over the past several years, growth has been steady and broad based, with EBITDA margins expanding into the mid twenties. This is notable given that the sector still trades as if we are permanently returning to 2020 conditions.
Financial conservatism has been a strength. Schlumberger generates high returns on capital, maintains disciplined debt management, and continues to invest in digital and automation technologies that make production cheaper and more efficient. It is fashionable to believe that the future belongs exclusively to wind turbines and rooftop solar. But the companies actually enabling the global economy to function are the ones who keep energy secure while the transition plods along far more slowly than idealists expected.
Valuation remains reasonable. Earnings for next year imply a mid teens price to cash flow multiple and a dividend yield comfortably above three percent. Investors who still view the sector through the lens of a single bad year are missing the structural reality. Countries are scrambling to secure long term energy supplies. Offshore drilling is returning as a growth engine. National oil companies are ramping capex. The service cycle, which lags commodity prices by one or two years, is firmly in recovery.
Schlumberger is not the perfect stock. Few are. But as a levered play on a multi year need for more reliable energy supply, it remains compelling. The best opportunities often arise when the public narrative is stuck in a fantasy while the underlying economics grind forward.
Mizuho Financial Group: Japan Finally Wakes Up From Its Monetary Coma
Japan has spent three decades fighting the laws of economic gravity. When you peg interest rates at zero for long enough, you destroy the natural functioning of credit markets. When you buy most of your own government bond market through your central bank, you distort pricing to the point where investors stop bothering to look. And when you artificially depress risk free rates for generations, you punish savers, banks, insurers, and pension funds.
Eventually, however, even the Bank of Japan must acknowledge reality. Inflation has reappeared. Wages are rising. Corporate governance reforms are accelerating. And perhaps most importantly for investors, the yield curve is beginning to steepen. This environment is oxygen for the megabanks.
Mizuho Financial Group is one of the key beneficiaries. It is large, liquid, conservatively managed, and uniquely positioned for rising net interest margins. After years of depressed profitability, earnings have surged. Revenue grew nearly twenty five percent in the latest financial year, while net income expanded at an even faster pace. The capital position is robust, with a tier one ratio above sixteen percent. Japanese banks, long dismissed as yield traps, are suddenly becoming income generating assets again.
The market has been slow to adjust to this new environment. Most global investors still associate Japanese banks with the stagnation era. They have not updated their mental models to reflect the fact that Japan is now one of the few developed countries with genuine monetary normalisation ahead rather than behind. The repricing of the banking sector is only in its early stages.
Mizuho trades at just over one times book value. For a bank with rising margins, improving credit quality, and strong capital, this is hardly demanding. The investor psychology that labelled the sector uninvestable for decades has not yet caught up with the numbers. While everyone debates American technology stocks, the most interesting monetary shift in the developed world is happening in Tokyo.
Investors should pay attention. Structural change, not headlines, drives long term returns.
Jabil: The Quiet Architect of the AI Industrial Build Out
It is extraordinary how quickly investors have convinced themselves that artificial intelligence will eliminate the business cycle and usher in a permanent era of growth. The hype machines of Silicon Valley have always been powerful, but they appear to have reached a new level of narrative engineering. What is often ignored is the unglamorous machinery required to turn AI from a concept into a commercially scaled reality: optical components, precision sensors, networking equipment, industrial controllers, power regulation systems, thermal management, and manufacturing at enormous volumes.
Jabil is one of the companies doing the actual work. Unlike the promotional darlings of the Nasdaq, Jabil does not spend its time producing glossy slide decks about the future of consciousness. It builds things. The company is one of the world’s leading contract manufacturers in high complexity electronics, serving data centres, cloud infrastructure, industrial robotics, medical devices, and advanced communications systems.
Revenue has been stable and rising. Margins have held firm. The balance sheet is disciplined, and earnings are set to expand materially over the next two years as new capacity comes online for hyperscalers, network operators, and industrial automation clients. Institutional ownership is extremely high, which tells you where the serious money sits compared with the tourists who chase momentum.
Valuation is attractive relative to the growth profile. Jabil trades on under twenty times next year’s earnings despite being a direct beneficiary of the physical build out behind AI. While markets obsess about the software layer, the real economic value is often captured by companies like Jabil who enable the hardware, logistics, and engineering required to scale these systems.
It is worth remembering that in every technological revolution, the early winners are usually the tool and equipment providers. They capture value while the platform companies fight one another in a series of expensive, low return arms races. Many investors appear to have forgotten this. Jabil has not.
The Common Thread: Capital Is Quietly Rotating Back to Reality
Schlumberger, Mizuho, and Jabil operate in very different industries. Yet they share three attributes that matter greatly for long term investors.
First, they sit in sectors where capital investment is rising after years of deprioritisation. Whether it is global energy, Japanese credit markets, or industrial manufacturing for AI infrastructure, these are industries coming off long periods of underinvestment.
Second, they exhibit improving financial quality at reasonable valuations. Earnings are growing, margins are expanding or stable, and balance sheets are not overstretched. This is unusual in a market where many popular companies trade on heroic assumptions about the future.
Third, they reflect the gradual return of economic realism. Energy demand is not vanishing. Monetary policy is normalising in places long thought incapable of change. And the hardware backbone of AI requires years of disciplined engineering rather than marketing slogans.
Investors who anchor their thinking to last decade’s narrative risk missing this shift. Capital is moving back to industries with tangible assets, real cash flow, and genuine demand. The world is quietly repricing.
TAMIM Takeaway
Do not confuse popularity with opportunity. The best returns often come from sectors investors have ignored for too long. Energy services, Japanese banking, and industrial technology may lack the glamour of the Nasdaq, but they possess something far more valuable: improving fundamentals at reasonable prices.
When cycles turn, they tend to run for years. Schlumberger, Mizuho, and Jabil each represent a structural rotation that is still in its early stages. The market will catch on eventually. Better to be positioned before the crowd arrives.
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Disclaimer: Schlumberger (NYSE.SLB), Mizuho Financial Group (TYO: MFG), and Jabil (NYSE: JBL) are held in TAMIM Portfolios as at date of article publication. Holdings can change substantially at any given time.
