Friday’s Hot Stocks: Citigroup, Wells Fargo, BP, More

Crude futures are well in the green this morning as traders look forward to the upcoming Baker Hughes Incorporated (NYSE:BHI) rig count release. Not surprisingly, the three main index futures are also in the green, as traders look to capture some of the market’s upside momentum. In this article, we’ll take a closer look at five trending stocks: Citigroup Inc (NYSE:C), Wells Fargo & Co (NYSE:WFC), Schlumberger Limited. (NYSE:SLB), T-Mobile US Inc (NASDAQ:TMUS), and BP plc (ADR) (NYSE:BP), and see why traders are displaying a keen interest in them this morning. We’ll also use SEC filings to see how top hedge funds are positioned in them.

At Insider Monkey, we track around 765 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).

Citigroup Beats Estimates

Citigroup Inc (NYSE:C) shares are slightly in the green this morning after the bank reported earnings of $1.24 per share on revenue of $17.55 billion, beating the consensus estimates of analysts by $0.14 per share and $80 million respectively. The bank’s CET 1 ratio moved up by 110 basis points year-over-year to 12.5%, while tangible book value rose to $63.53 from $59.18 per share. The “bad bank” Citi created to dispose of its unwanted assets, Citi Holdings, continued to shrink in the quarter, with revenue down by 57% year-over-year to $843 million. If the global economy recovers, Citigroup shares will do well. Ken Fisher‘s Fisher Asset Management was a top shareholder of Citigroup Inc (NYSE:C) at the end of June, owning 12.06 million shares.

Wells Fargo Meets the Mark

Wells Fargo & Co (NYSE:WFC) reported in-line results for the second quarter, delivering EPS of $1.01 on revenue of $22.16 billion for the period, both of which met analysts’ expectations. Sales rose by 3.9% year-over-year, driven by total average loan growth of 9% year-over-year and total average deposit growth of 4%. The company’s common equity tier 1 ratio was 10.6%, while book value per common share rose to $35.38 from $32.96 per share. Many analysts expect Wells Fargo & Co (NYSE:WFC) to do well once interest rates normalize. The bank is one of the biggest positions held by Warren Buffett‘s Berkshire Hathaway as of March 31.

On the next page we’ll find out why Schlumberger, T-Mobile, and BP are in the spotlight this morning.

Schlumberger Wins Contract

Schlumberger Limited. (NYSE:SLB) is in the spotlight after its OneSubsea subsidiary won a contract from Australia’s Woodside Petroleum. The contract, which has a total value of $300 million, involves the procurement, construction, and engineering of the Greater Enfield project in offshore Western Australia. Schlumberger shares have rallied by 15% year-to-date, largely on the back of more bullish energy sentiment. Of the 766 active funds that we track, 56 owned $1.31 billion worth of positions in Schlumberger Limited. (NYSE:SLB) as of March 31, compared to 51 funds with $1.92 billion in holdings respectively on December 31.

T-Mobile Rides Pokemon Go’s Coattails

Everybody’s favorite carrier T-Mobile US Inc (NASDAQ:TMUS) is characteristically taking advantage of the Pokemon Go craze by offering its users free, unlimited data for the augmented game for a full year beginning July 19. Due to its data intensive nature, many users have complained that Pokemon Go uses too much bandwidth. Although T-Mobile won’t make any money with its new promotion, it will likely garner new subscribers and win more loyalty from existing users for its program. That could translate into more profits in the long run. Shares of T-Mobile are up by 12% year-to-date. 52 funds in our system had a long position in T-Mobile US Inc (NASDAQ:TMUS) at the end of the first quarter.

BP to Invest More in Argentina

According to Reuters, BP plc (ADR) (NYSE:BP) subsidiary Pan American Energy LLC, is planning to invest $1.4 billion in upstream operations in Argentina this year. The plans include investing $900 million in Golfo San Jorge and investing another $300 million in the unconventional plays of Neuquen province. Given its unconventional shale gas reserves, Argentina has substantial production growth potential in the years to come. The number of funds in our database with holdings in BP plc (ADR) (NYSE:BP) rose by two quarter-over-quarter to 34 as of the end of March.

Disclosure: None