Here is What Hedge Funds Think About Schlumberger Limited. (SLB)

Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Schlumberger Limited. (NYSE:SLB).

Schlumberger Limited. (NYSE:SLB) was in 61 hedge funds’ portfolios at the end of the third quarter of 2015. SLB investors should pay attention to an increase in enthusiasm from smart money in recent months. There were 55 hedge funds in our database with SLB positions at the end of the previous quarter. At the end of this article we will also compare SLB to other stocks, including Kraft Heinz Co (NASDAQ:KHC), Celgene Corporation (NASDAQ:CELG), and Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU) to get a better sense of its popularity.

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With all of this in mind, let’s check out the fresh action surrounding Schlumberger Limited. (NYSE:SLB).

What have hedge funds been doing with Schlumberger Limited. (NYSE:SLB)?

At the end of the third quarter, a total of 61 of the hedge funds tracked by Insider Monkey were long this stock, up by 11% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Ken Griffin’s Citadel Investment Group has the biggest position in Schlumberger Limited. (NYSE:SLB), worth close to $586.4 million, corresponding to 0.6% of its total 13F portfolio. The second most bullish fund manager is D E Shaw, run by D. E. Shaw, which holds a $514.6 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Some other peers that hold long positions comprise Ken Fisher’s Fisher Asset Management, Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.

As aggregate interest increased, some big names have been driving this bullishness. Soros Fund Management, managed by George Soros, assembled the most valuable position in Schlumberger Limited. (NYSE:SLB). According to its latest 13F filing, the fund had $67.7 million invested in the company at the end of the quarter. Jorge Paulo Lemann’s 3G Capital also made a $27.6 million investment in the stock during the quarter. The following funds were also among the new SLB investors: Daniel S. Och’s OZ Management, Larry Foley and Paul Farrell’s Bronson Point Partners, and Malcolm Fairbairn’s Ascend Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Schlumberger Limited. (NYSE:SLB) but similarly valued. These stocks are Kraft Heinz Co (NASDAQ:KHC), Celgene Corporation (NASDAQ:CELG), Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU), and QUALCOMM, Inc. (NASDAQ:QCOM). This group of stocks’ market valuations are closest to SLB’s market valuation.

As you can see these stocks had an average of 50 hedge funds with bullish positions and the average amount invested in these stocks was $8.57 billion. In the case of SLB, that figure stood at $2.65 billion. QUALCOMM, Inc. (NASDAQ:QCOM) is the most popular stock in this table, while Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU) is the laggard with only 12 bullish hedge fund positions. While Schlumberger Limited. (NYSE:SLB) is not the most popular stock in this group, hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard QCOM might be a better candidate to consider a long position.