First Sanctions and Now Its Own Shareholders: Seadrill Ltd (SDRL) Just Can’t Get A Break

Page 1 of 2

Shareholders of a subsidiary of Seadrill Ltd (NYSE:SDRL), a $3.51 billion offshore drilling contractor, have sued the company in light of a deal signed with the Russian state-owned oil firm Rosneft back in June 2014, which has been put on hold since the sanctions in August last year. The shareholders of the subsidiary North Atlantic Drilling contend that both the parent company and the subsidiary made false and misleading statements, downplaying the risks of the deal with Rosneft. The deal involved Rosneft gaining a 30% stake in NADL in exchange for cash and a total of 150 onshore rigs. In early trading hours Seadrill’s stock was down by more than 4%. The news was first reported in the Russian business daily Kommersant on Friday.

oil-500711_1280 (1)

Seadrill Ltd (NYSE:SDRL) has lately been in a tough shape with the stock dropping by more than 37% so far this year. The stock has received some uplift recently on the back of the second quarter results, which managed to beat the earnings estimates and revenues that were almost in line with the expectations. The company has embarked on a rigorous cost cutting program and cost savings for the current year are expected to be double compared to the last year. Seadrill Ltd (NYSE:SDRL)’s management expects the low oil price environment to persist throughout 2016 with a real possibility of continuation in 2017 as well.

As Seadrill is undergoing some tough times dictated by low commodity prices, hedge funds have been cautious around the company, as our records show. We assess hedge fund sentiment that surrounds a stock based on 13F filings of more than 700 institutional investors, which we also use to determine the top 15 small-cap stocks in which they are invested.

We gather and share this information based on 16 years of research, which showed that these 15 most popular small-cap picks have a great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests, and easily beating the most popular large-cap picks of hedge funds, which nonetheless get the majority of their collective capital. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic only the best ideas of the best money managers on your own? Since the beginning of forward testing in August 2012, the Insider Monkey small-cap strategy has outperformed the market every year, returning 123%, around double than the gains posted by the S&P 500 ETF (SPY) during the same period (see more details).

Page 1 of 2