Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
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.