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If You Own National-Oilwell Varco (NOV) Stock, Should You Sell It Now?

Alex Smith
·3 mins read

Vulcan Value Partners recently released its Q2 2020 Investor Letter, a copy of which you can download here. The Large Cap Composite fund posted a return of 24.5% for the second quarter (net of fees), outperforming its benchmark, the S&P 500 Index which returned 20.5% in the same quarter. You should check out Vulcan Value Partners' top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, Vulcan Value Partners' highlighted a few stocks and National Oilwell Varco Inc (NYSE:NOV) is one of them. National Oilwell Varco Inc (NYSE:NOV) is an oilfield equipment manufacturer and technology provider. Year-to-date, National Oilwell Varco Inc (NYSE:NOV) stock lost 50.8% and on August 28th it had a closing price of $12.32. Here is what Vulcan Value Partners' said:

"National Oilwell Varco has been a disappointing investment for us. Our investment case was based on the belief that demand for National Oilwell Varco’s products was largely independent of oil prices over the long term. National Oilwell Varco’s products are used in harsh environments and are very important to safety and oil field productivity. National Oilwell Varco’s customers reacted to the fall in oil prices by cannibalizing existing equipment and becoming dramatically more efficient than we anticipated, resulting in lower demand for National Oilwell Varco’s products. National Oilwell Varco continues to produce free cash flow, has a strong balance sheet, and will, in our opinion, be a survivor in the current industry shakeout. However, its value has declined, and our original investment case is no longer intact. We used the proceeds from National Oilwell Varco to buy businesses with better long-term prospects and deeply discounted prices."

construction, drill, drilling, energy, equipment, exploration, fuel, gas, gasoline, holland, industrial, industry, maintenance, ocean, offshore, oil, petroleum, plant, platform, port, power, production, pump, refinery, rig, rotterdam, sea, sky, steel, technology, tower, well
construction, drill, drilling, energy, equipment, exploration, fuel, gas, gasoline, holland, industrial, industry, maintenance, ocean, offshore, oil, petroleum, plant, platform, port, power, production, pump, refinery, rig, rotterdam, sea, sky, steel, technology, tower, well

Copyright: 1971yes / 123RF Stock Photo

In Q1 2020, the number of bullish hedge fund positions on National Oilwell Varco Inc (NYSE:NOV) stock decreased by about 6% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with National Oilwell Varco's downside potential. Our calculations showed that National Oilwell Varco Inc (NYSE:NOV) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. 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 precious metals prices. So, we are checking out this junior gold mining stock.. We go through lists like the 10 most profitable companies in America 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.