National-Oilwell Varco, Inc. (NYSE:NOV) shareholders have witnessed a decrease in hedge fund sentiment recently.
In the eyes of most traders, hedge funds are perceived as slow, outdated financial tools of years past. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey choose to focus on the masters of this club, about 450 funds. Most estimates calculate that this group has its hands on the lion's share of the hedge fund industry's total asset base, and by tracking their highest performing equity investments, we have unearthed a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as integral, optimistic insider trading sentiment is a second way to parse down the world of equities. Just as you'd expect, there are lots of reasons for an upper level exec to drop shares of his or her company, but just one, very obvious reason why they would buy. Several academic studies have demonstrated the impressive potential of this tactic if you understand what to do (learn more here).
Keeping this in mind, let's take a peek at the recent action encompassing National-Oilwell Varco, Inc. (NYSE:NOV).
Heading into Q2, a total of 47 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedge funds' sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes significantly.
When looking at the hedgies we track, Warren Buffett's Berkshire Hathaway had the biggest position in National-Oilwell Varco, Inc. (NYSE:NOV), worth close to $529.5 million, comprising 0.6% of its total 13F portfolio. On Berkshire Hathaway's heels is Jason Capello of Merchants' Gate Capital, with a $225 million position; 10.4% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Andreas Halvorsen's Viking Global, and Jim Simons's Renaissance Technologies.
Since National-Oilwell Varco, Inc. (NYSE:NOV) has witnessed a declination in interest from the entirety of the hedge funds we track, we can see that there exists a select few hedge funds that slashed their positions entirely heading into Q2. Interestingly, Keith Meister's Corvex Capital cut the biggest stake of all the hedgies we watch, totaling about $61.5 million in call options. Rob Citrone's fund, Discovery Capital Management, also dropped its stock, about $36.1 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider purchases made by high-level executives is most useful when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time frame, National-Oilwell Varco, Inc. (NYSE:NOV) has experienced 1 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let's check out hedge fund and insider activity in other stocks similar to National-Oilwell Varco, Inc. (NYSE:NOV). These stocks are Weatherford International Ltd (NYSE:WFT), FMC Technologies, Inc. (NYSE:FTI), Cameron International Corporation (NYSE:CAM), Baker Hughes Incorporated (NYSE:BHI), and Halliburton Company (NYSE:HAL). All of these stocks are in the oil & gas equipment & services industry and their market caps are closest to NOV's market cap.