Here’s What This Metric Says about Schlumberger Limited. (SLB)

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Schlumberger Limited. (NYSE:SLB) has experienced an increase in hedge fund interest lately. At the end of September, the company was included in the equity portfolios of 59 funds from our database, up from 55 funds a quarter earlier. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT), Mastercard Inc (NYSE:MA), and United Parcel Service, Inc. (NYSE:UPS) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

With all of this in mind, we’re going to take a peek at the latest action encompassing Schlumberger Limited. (NYSE:SLB).

Hedge fund activity in Schlumberger Limited. (NYSE:SLB)

As stated earlier, at the end of the third quarter, a total of 59 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 7% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Ken Fisher’s Fisher Asset Management has the largest position in Schlumberger Limited. (NYSE:SLB), worth close to $318.5 million, amounting to 0.6% of its total 13F portfolio. The second largest stake is held by Phill Gross and Robert Atchinson’s Adage Capital Management, with a $155.7 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions include Steven Richman’s East Side Capital (RR Partners) and Kerr Neilson’s Platinum Asset Management.

As one would reasonably expect, key money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, established the most outsized call position in Schlumberger Limited. (NYSE:SLB). Citadel Investment Group had $63.9 million invested in the company at the end of the quarter. Jorge Paulo Lemann’s 3G Capital also initiated a $39.3 million position during the quarter. The other funds with brand new SLB positions are Israel Englander’s Millennium Management, John Osterweis’ Osterweis Capital Management, and Alan Howard’s Brevan Howard.

Let’s go over hedge fund activity in other stocks similar to Schlumberger Limited. (NYSE:SLB). These stocks are Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT), Mastercard Inc (NYSE:MA), United Parcel Service, Inc. (NYSE:UPS), and Accenture Plc (NYSE:ACN). This group of stocks’ market valuations match SLB’s market valuation.

As you can see these stocks had an average of 43 investors with bullish positions and the average amount invested in these stocks was $2.49 billion. By comparison, the 59 investors from our database amassed $1.57 billion worth of SLB’s shares at the end of September.  Mastercard Inc (NYSE:MA) is the most popular stock in this table, while Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT) is the least popular one with only 10 bullish hedge fund positions. Schlumberger Limited. (NYSE:SLB) is not the most popular stock in this group but 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 Mastercard Inc (NYSE:MA) might be a better candidate to consider a long position.