A Form 4 filed with the SEC has disclosed that Howard Wolf, a member of the Board of Directors at Nabors Industries Ltd. (NYSE:NBR), directly purchased 11,000 shares of stock on July 25th at an average price of about $14.90 per share. Nabors Industries Ltd. (NYSE:NBR) is a $4.4 billion market cap contract driller primarily operating in onshore North America, with some international and offshore activity as well. Studies generally show a small outperformance effect for stocks bought by insiders (read our analysis of studies on insider trading). This can be attributed to the fact that it is generally irrational for insiders to increase company-specific risk as opposed to diversifying their wealth- unless they happen to be particularly confident in the stock’s prospects.
Nabors Industries Ltd. (NYSE:NBR) has released its results for the second quarter of 2013. The company’s operating revenues were 14% lower versus a year earlier and down on a q/q basis as well. However, management was able to cut costs to the point that after adding back adjustments for sales and disposal of long lived assets pretax income from continuing operations was higher than in the prior year period. This was offset by losses from discontinued operations, but in theory going forward this would not drag down the bottom line any further. Wall Street analysts project $1.23 in earnings per share for 2014 (against 41 cents in earnings from continuing operations year to date) for a forward earnings multiple of 12. Investors should note that Nabors Industries Ltd. (NYSE:NBR) is highly dependent on the overall economy (which makes sense, as drilling activity tends to be tied to oil prices and therefore to macro growth) with a beta of 2.9.
In addition to insider trading activity, Insider Monkey tracks quarterly 13F filings from hundreds of hedge funds and other notable investors. We’ve found that the information in these filings is useful in developing investment strategies (for example, the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year) and in tracking interest in individual stocks over time. During the end of the first quarter of 2013, Cliff Asness’s AQR Capital Management initiated a position of 3.9 million shares in Nabors Industries Ltd. (NYSE:NBR) (see Asness’s stock picks).
Another major market player in drilling, and focused on onshore operations, is Helmerich & Payne, Inc. (NYSE:HP). Its stock recently dropped 3% on reporting only slightly higher revenue and operating income in its most recent quarter compared to the same period in the previous fiscal year. Interestingly, sales growth was concentrated in offshore and in international operations- U.S. onshore, which composed over 80% of revenue, experienced a small decline in business.