Is Noble Corp plc (NYSE:NE) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the latest market-moving information.
Is Noble Corp plc (NYSE:NE) a healthy stock for your portfolio? Prominent investors are reducing their bets on the stock. The number of bullish hedge fund bets retreated by 5 lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Compass Minerals International, Inc. (NYSE:CMP), Agios Pharmaceuticals Inc (NASDAQ:AGIO), and United Bankshares, Inc. (NASDAQ:UBSI) to gather more data points.
Follow Noble Corp (NYSE:NE)
Follow Noble Corp (NYSE:NE)
At the moment there are a lot of methods stock market investors put to use to grade stocks. A duo of the less known methods are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the top money managers can outclass the broader indices by a solid amount (see the details here).
With all of this in mind, let’s take a glance at the new action encompassing Noble Corp plc (NYSE:NE).
How have hedgies been trading Noble Corp plc (NYSE:NE)?
Heading into Q4, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decrease of 19% from the previous quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Firefly Value Partners, managed by Ryan Heslop and Ariel Warszawski, holds the most valuable position in Noble Corp plc (NYSE:NE). According to its latest quarterly report, the fund has a $50.1 million position in the stock, comprising 7.7% of its 13F portfolio. The second largest stake, with an estimated value of $31 million, is held by AQR Capital Management, led by Cliff Asness; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism consist of Ray Dalio’s Bridgewater Associates, Todd J. Kantor’s Encompass Capital Advisors and Douglas Dethy’s DC Capital Partners.
Because Noble Corp plc (NYSE:NE) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there was a specific group of funds that decided to sell off their entire stakes by the end of the third quarter. Interestingly, Daniel Bubis’s Tetrem Capital Management said goodbye to the biggest position of all the hedgies followed by Insider Monkey, totaling about $18.1 million in stock, and David Costen Haley’s HBK Investments was right behind this move, as the fund sold off about $12.4 million worth of NE shares. These bearish behaviors are important to note, as total hedge fund interest fell by 5 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks similar to Noble Corp plc (NYSE:NE). These stocks are Compass Minerals International, Inc. (NYSE:CMP), Agios Pharmaceuticals Inc (NASDAQ:AGIO), United Bankshares, Inc. (NASDAQ:UBSI), and Black Stone Minerals LP (NYSE:BSM). This group of stocks’ market valuations are similar to NE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CMP | 10 | 82064 | -8 |
| AGIO | 9 | 31267 | -7 |
| UBSI | 7 | 29465 | 1 |
| BSM | 4 | 70758 | -1 |
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. Compass Minerals International, Inc. (NYSE:CMP) is the most popular stock in this table. On the other hand Black Stone Minerals LP (NYSE:BSM) is the least popular one with only 4 bullish hedge fund positions. Noble Corp plc (NYSE:NE) is the superstar of this group, having attracted a total of $187 million in investments from 22 elite funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
