Sometimes patience really is a virtue. I've been watching and waiting for Core Laboratories N.V. (NYSE:CLB) stock to fall for a couple of years as I never really loved the value. I said as much as I opined a couple of years ago that, "I'd like to buy it much cheaper, and that will only happen if oil takes a big dive." Well, I finally had my pullback thanks to the deep plunge in oil prices over the past few months.

CLB Chart

CLB data by YCharts.

With the stock now selling off, I'm finally comfortable adding this top-tier oil-field technology stock to my portfolio.

Core Labs 101
For those who aren't familiar with the company, Core Labs uses its technology to help energy companies optimize the recovery of oil and gas from reservoirs. Because of its technology focus, Core Labs' margins are outstanding. In fact, just last quarter, the company reported that its operating margin had increased to 33%, which was the highest of all major oil-field service companies during the quarter. Even better is free cash flow as Core Labs converted $0.30 of every dollar of revenue into free cash flow -- again, the highest of all the oil-field service companies.

The company really is an outlier in the energy sector. Oil-field service companies are known for their low margins due to the intense competition within the sector. Meanwhile, energy-related companies in general are known for being heavy spenders because of the capital intensity of the sector. However, without these issues, Core Labs can generate gobs of cash, which it returns to shareholders as it buys back a meaningful amount of stock each quarter, while also paying a growing dividend.

Best keeps getting better
Because Core Labs' business doesn't need a whole lot of cash, its returns are really robust, and they've gotten stronger over the past few years, as we see in this chart.

CLB Return on Equity (TTM) Chart

CLB Return on Equity (TTM) data by YCharts.

Of the three metrics above, Core Labs sees return on invested capital, or ROIC, as being the most important metric for oil-field service companies. Its probably not a surprise that its capital-light business model has enabled the company to have the highest ROIC of all oilfield service companies in its peer group.

The company's success is driven by its continued ability to introduce new technologies into the marketplace. It combines this innovation with operational excellence to really move the needle for investors. That's quite evident by the fact that the company set new all-time records for revenue and free cash flow last quarter, and would have set records for earnings per share, net income and operating margins if it wasn't for foreign exchange issues.

Clearly, Core Labs is a well-oiled machine that continues to run at peak performance.

Finally on sale
What's even better to see, for buyers at least, is that while Core Labs' business has been getting better, its value has been coming down. As we see on the following chart, all of the company's meaningful valuation metrics have come down as its value is being depressed by low oil prices.

CLB PE Ratio (TTM) Chart

CLB P/E Ratio (TTM) data by YCharts.

To some degree, there is some justification to this, as the company's business isn't completely insulated from low oil prices. Core Labs recently issued rather weak first-quarter guidance as it sees its margins being squeezed because of the rapid drop off in oil and gas activity. However, the company is beginning to right-size its costs in order to get its margins back in line.

This is why I see its sell-off as a buying opportunity, as the market reacts to the short-term weakness in the company's margins, which should improve over the next year, even if the price of oil does not. Meanwhile, its business should really reaccelerate as activity within the energy industry improves.  

Investor takeaway
I've been waiting a long time for a golden opportunity to buy Core Labs' stock. Now that the opportunity is at hand, I've been able to take advantage of what should be a short-term pull back and begin my long-term relationship with the company.