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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 817 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Nabors Industries Ltd. (NYSE:NBR) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is NBR a good stock to buy now? Money managers were getting less optimistic. The number of long hedge fund positions shrunk by 3 lately. Nabors Industries Ltd. (NYSE:NBR) was in 12 hedge funds' portfolios at the end of September. The all time high for this statistics is 39. Our calculations also showed that NBR isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 15 hedge funds in our database with NBR holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most market participants, hedge funds are assumed to be underperforming, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation at the moment, Our researchers choose to focus on the upper echelon of this club, about 850 funds. These money managers direct the majority of the smart money's total asset base, and by following their top investments, Insider Monkey has unearthed a few investment strategies that have historically surpassed Mr. Market. Insider Monkey's flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Bill Miller of Miller Value Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind we're going to take a look at the key hedge fund action regarding Nabors Industries Ltd. (NYSE:NBR).
Do Hedge Funds Think NBR Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the second quarter of 2020. By comparison, 20 hedge funds held shares or bullish call options in NBR a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Nabors Industries Ltd. (NYSE:NBR), with a stake worth $5.3 million reported as of the end of September. Trailing Renaissance Technologies was Arrowstreet Capital, which amassed a stake valued at $1.6 million. Miller Value Partners, Millennium Management, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Elm Ridge Capital allocated the biggest weight to Nabors Industries Ltd. (NYSE:NBR), around 1.25% of its 13F portfolio. Ellington is also relatively very bullish on the stock, earmarking 0.12 percent of its 13F equity portfolio to NBR.
Due to the fact that Nabors Industries Ltd. (NYSE:NBR) has experienced falling interest from the smart money, logic holds that there exists a select few fund managers that slashed their positions entirely in the third quarter. It's worth mentioning that Parvinder Thiara's Athanor Capital cut the largest stake of the "upper crust" of funds followed by Insider Monkey, totaling an estimated $1.1 million in stock. Michael Gelband's fund, ExodusPoint Capital, also said goodbye to its stock, about $0.3 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 3 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Nabors Industries Ltd. (NYSE:NBR) but similarly valued. These stocks are Mustang Bio, Inc. (NASDAQ:MBIO), LSI Industries, Inc. (NASDAQ:LYTS), Gannett Co., Inc. (NYSE:GCI), LCNB Corp. (NASDAQ:LCNB), Stratus Properties Inc. (NASDAQ:STRS), Protara Therapeutics, Inc. (NASDAQ:TARA), and Daktronics, Inc. (NASDAQ:DAKT). This group of stocks' market valuations are similar to NBR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MBIO,13,17492,0 LYTS,9,23658,3 GCI,11,14522,-1 LCNB,2,2996,0 STRS,3,26544,1 TARA,15,122192,7 DAKT,14,12586,0 Average,9.6,31427,1.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.6 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $14 million in NBR's case. Protara Therapeutics, Inc. (NASDAQ:TARA) is the most popular stock in this table. On the other hand LCNB Corp. (NASDAQ:LCNB) is the least popular one with only 2 bullish hedge fund positions. Nabors Industries Ltd. (NYSE:NBR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NBR is 49.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on NBR as the stock returned 167.3% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.