Should You Follow the Smart Money Back Into Seadrill Ltd (SDRL)?

As industry-wide interest jumped, key money managers have been driving this bullishness. Ken Griffin’s Citadel Investment Group established the most outsized call position in Seadrill Ltd (NYSE:SDRL). Citadel Investment Group had $1.6 million invested in the holding at the end of the quarter. Boaz Weinstein’s Saba Capital also initiated a $0.5 million position during the quarter. The other funds with brand new SDRL positions are Joshua Packwood and Schuster Tanger’s Radix Partners, Benjamin A. Smith’s Laurion Capital Management, and Jim Simons’ Renaissance Technologies.

Let’s also examine hedge fund activity in other stocks similar to Seadrill Ltd (NYSE:SDRL). We will take a look at Infinera Corp. (NASDAQ:INFN), Travelport Worldwide Ltd (NYSE:TVPT), CBL & Associates Properties, Inc. (NYSE:CBL), and Aaron’s, Inc. (NYSE:AAN). All of these stocks’ market caps resemble SDRL’s market cap.

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $213 million. That figure was $34 million in SDRL’s case. Travelport Worldwide Ltd (NYSE:TVPT) is the most popular stock in this table. On the other hand CBL & Associates Properties, Inc. (NYSE:CBL) is the least popular one with only 11 bullish hedge fund positions. Seadrill Ltd (NYSE:SDRL) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TVPT might be a better candidate to consider taking a long position in.

Disclosure: None