Is Nabors Industries Ltd. (NYSE:NBR) an outstanding investment right now? The best stock pickers are reducing their bets on the stock. The number of bullish hedge fund positions shrunk by 7 recently.
According to most stock holders, hedge funds are viewed as underperforming, outdated financial vehicles of yesteryear. While there are greater than 8000 funds trading today, we at Insider Monkey choose to focus on the masters of this club, around 450 funds. It is estimated that this group has its hands on the majority of the smart money’s total capital, and by paying attention to their top picks, we have found a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Just as key, optimistic insider trading sentiment is a second way to parse down the marketplace. As the old adage goes: there are many incentives for an insider to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this strategy if you know where to look (learn more here).
Keeping this in mind, let’s take a glance at the key action surrounding Nabors Industries Ltd. (NYSE:NBR).
What have hedge funds been doing with Nabors Industries Ltd. (NYSE:NBR)?
At year’s end, a total of 21 of the hedge funds we track were long in this stock, a change of -25% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Michael Messner’s Seminole Capital (Investment Mgmt) had the largest position in Nabors Industries Ltd. (NYSE:NBR), worth close to $47 million, accounting for 2.6% of its total 13F portfolio. On Seminole Capital (Investment Mgmt)’s heels is Blue Harbour Group, managed by Clifton S. Robbins, which held a $29 million position; 3% of its 13F portfolio is allocated to the stock. Other peers that are bullish include Ken Griffin’s Citadel Investment Group, Ron Gutfleish’s Elm Ridge Capital and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Judging by the fact that Nabors Industries Ltd. (NYSE:NBR) has faced bearish sentiment from hedge fund managers, it’s safe to say that there was a specific group of hedgies that decided to sell off their positions entirely last quarter. Intriguingly, Cliff Asness’s AQR Capital Management dropped the biggest stake of the “upper crust” of funds we watch, totaling about $30 million in stock.. Bill Miller’s fund, Legg Mason Capital Management, also cut its stock, about $5 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 7 funds last quarter.
How are insiders trading Nabors Industries Ltd. (NYSE:NBR)?
Insider purchases made by high-level executives is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the latest half-year time frame, Nabors Industries Ltd. (NYSE:NBR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
With the returns demonstrated by the aforementioned tactics, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Nabors Industries Ltd. (NYSE:NBR) shareholders fit into this picture quite nicely.
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