After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards National Energy Services Reunited Corp. (NASDAQ:NESR).
Is NESR a good stock to buy now? Hedge fund interest in National Energy Services Reunited Corp. (NASDAQ:NESR) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that NESR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare NESR to other stocks including MarineMax, Inc. (NYSE:HZO), XBiotech Inc. (NASDAQ:XBIT), and Independence Holding Company (NYSE:IHC) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, 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 real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. You can subscribe to our free daily newsletter on our website. Now let’s go over the new hedge fund action surrounding National Energy Services Reunited Corp. (NASDAQ:NESR).
How have hedgies been trading National Energy Services Reunited Corp. (NASDAQ:NESR)?
Heading into the fourth quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in NESR over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Millennium Management was the largest shareholder of National Energy Services Reunited Corp. (NASDAQ:NESR), with a stake worth $26.6 million reported as of the end of September. Trailing Millennium Management was Encompass Capital Advisors, which amassed a stake valued at $22.4 million. Arrowstreet Capital, Balyasny Asset Management, and SIR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Encompass Capital Advisors allocated the biggest weight to National Energy Services Reunited Corp. (NASDAQ:NESR), around 1.99% of its 13F portfolio. Yaupon Capital is also relatively very bullish on the stock, dishing out 0.16 percent of its 13F equity portfolio to NESR.
Judging by the fact that National Energy Services Reunited Corp. (NASDAQ:NESR) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few fund managers that decided to sell off their entire stakes heading into Q4. Interestingly, Nick Thakore’s Diametric Capital sold off the largest investment of the 750 funds watched by Insider Monkey, totaling close to $0.4 million in stock. Ken Griffin’s fund, Citadel Investment Group, also sold off its stock, about $0.3 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks similar to National Energy Services Reunited Corp. (NASDAQ:NESR). We will take a look at MarineMax, Inc. (NYSE:HZO), XBiotech Inc. (NASDAQ:XBIT), Independence Holding Company (NYSE:IHC), OneSpaWorld Holdings Limited (NASDAQ:OSW), Green Plains Inc. (NASDAQ:GPRE), Genesis Energy, L.P. (NYSE:GEL), and The York Water Company (NASDAQ:YORW). This group of stocks’ market valuations are closest to NESR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HZO | 21 | 52688 | 0 |
| XBIT | 4 | 2598 | 0 |
| IHC | 5 | 26115 | 0 |
| OSW | 10 | 67325 | -4 |
| GPRE | 17 | 156646 | -3 |
| GEL | 3 | 6208 | -1 |
| YORW | 9 | 16014 | 1 |
| Average | 9.9 | 46799 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.9 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $27 million in NESR’s case. MarineMax, Inc. (NYSE:HZO) is the most popular stock in this table. On the other hand Genesis Energy, L.P. (NYSE:GEL) is the least popular one with only 3 bullish hedge fund positions. National Energy Services Reunited Corp. (NASDAQ:NESR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NESR is 45.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on NESR as the stock returned 44.5% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
