Miller Value Partners, an investment management company, released its “Deep Value Strategy” first-quarter 2026 investor letter. A copy of the letter can be downloaded here. The Strategy started the year on a strong note, returning +8.39% (net of fees) compared to the S&P 1500 Value Index’s +0.19% and the S&P 600 Value Index’s +4.32% returns. The strategy gained from ongoing rotation to small-cap value stocks and investments made in the energy sector. The year began with broadening market trends favoring lower-valued, smaller-capitalization equities, though this Value outperformance cycle remains overlooked by investors focused on AI and tech firms. The February onset of war in Iran led to increased energy prices, rising bond yields, and market volatility. The firm believes attractive investment opportunities persist in lower-valued securities and smaller market caps, highlighting companies with robust earnings and cash-flow yields. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Miller Value Deep Value Strategy highlighted Nabors Industries Ltd. (NYSE:NBR) as leading contributor. Based in Hamilton, Bermuda, Nabors Industries Ltd. (NYSE:NBR) is a leading drilling and drilling-related services provider for oil and natural gas wells. On April 15, 2026, Nabors Industries Ltd. (NYSE:NBR) closed at $82.24 per share. One-month return of Nabors Industries Ltd. (NYSE:NBR) was 2.84%, and its shares gained 166.06% over the past 52 weeks. Nabors Industries Ltd. (NYSE:NBR) has a market capitalization of $1.21 billion.
Miller Value Deep Value Strategy stated the following regarding Nabors Industries Ltd. (NYSE:NBR) in its Q1 2026 investor letter:
“During the quarter, the largest positive contributor was Nabors Industries Ltd. (NYSE:NBR), which was up 58%. Nabors successfully completed the sale of their Quail Tools business segment, which significantly improved the company balance sheet. Nabors net debt leverage ended the year near 1.8x. Over the past 12 months the company has reduced total debt by more than $350M, eliminating all debt maturities before 2029. Nabors looks well positioned to benefit over the coming years from higher commodity prices, an eventual pick-up in North America rig demand, expansion of their low capital-intensive and higher margin drilling solutions and scaling their 50 rig program with SANAD. The company is also well positioned for any incremental global drilling. Nabors has been a long-term partner with leading Integrated Energy companies, historically having more than 10 rigs working in Venezuela. While Nabors has a sizable Middle East presence which poses some risk with the ongoing Iran conflict, to our knowledge the company has not reported material disruption to date. Near-term risks would also be unexpected return to lower commodity price environment which we believe is low given the ongoing industry supply challenges and a slower than expected recovery in N.A. rig market. Our view of Nabors’ long-term upside potential is still multiples of the current share price if the company executes on the factors discussed above, with the shares are still trading near 2x cash flow and more than 40% normalized free cash flow yield.”
Nabors Industries Ltd. (NYSE:NBR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 24 hedge fund portfolios held Nabors Industries Ltd. (NYSE:NBR) at the end of the fourth quarter, up from 19 in the previous quarter. In Q4 2025, Nabors Industries Ltd. (NYSE:NBR) reported consolidated revenue of $798 million, a decrease of $21 million sequentially. While we acknowledge the risk and potential of Nabors Industries Ltd. (NYSE:NBR) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Nabors Industries Ltd. (NYSE:NBR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Nabors Industries Ltd. (NYSE:NBR) and shared the list of best oil & gas drilling stocks to buy. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
