Is Schlumberger Limited. (NYSE:SLB) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Schlumberger Limited. (NYSE:SLB) investors should be aware of a decrease in enthusiasm from smart money of late. Our calculations also showed that slb isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a glance at the latest hedge fund action regarding Schlumberger Limited. (NYSE:SLB).
Hedge fund activity in Schlumberger Limited. (NYSE:SLB)
Heading into the second quarter of 2019, a total of 49 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SLB over the last 15 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds, Orbis Investment Management held the most valuable stake in Schlumberger Limited. (NYSE:SLB), which was worth $427.3 million at the end of the first quarter. On the second spot was International Value Advisers which amassed $256.5 million worth of shares. Moreover, Fisher Asset Management, D E Shaw, and Two Sigma Advisors were also bullish on Schlumberger Limited. (NYSE:SLB), allocating a large percentage of their portfolios to this stock.
Judging by the fact that Schlumberger Limited. (NYSE:SLB) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there exists a select few money managers that elected to cut their positions entirely by the end of the third quarter. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the largest investment of the “upper crust” of funds watched by Insider Monkey, worth close to $43 million in stock. Michael Kharitonov and Jon David McAuliffe’s fund, Voleon Capital, also dumped its stock, about $3.6 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 3 funds by the end of the third quarter.
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 The Estee Lauder Companies Inc (NYSE:EL), Walgreens Boots Alliance Inc (NASDAQ:WBA), Colgate-Palmolive Company (NYSE:CL), and CME Group Inc (NASDAQ:CME). This group of stocks’ market caps are closest to SLB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EL | 39 | 1436457 | 6 |
| WBA | 33 | 586665 | -6 |
| CL | 42 | 1907640 | -3 |
| CME | 42 | 1845552 | -8 |
| Average | 39 | 1444079 | -2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 39 hedge funds with bullish positions and the average amount invested in these stocks was $1444 million. That figure was $2070 million in SLB’s case. Colgate-Palmolive Company (NYSE:CL) is the most popular stock in this table. On the other hand Walgreens Boots Alliance Inc (NASDAQ:WBA) is the least popular one with only 33 bullish hedge fund positions. Compared to these stocks Schlumberger Limited. (NYSE:SLB) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately SLB wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SLB were disappointed as the stock returned -19.3% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
