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Should You Avoid National-Oilwell Varco, Inc. (NYSE:NOV)?

National-Oilwell Varco, Inc. (NYSE:NOV) was in 43 hedge funds’ portfolio at the end of the fourth quarter of 2012. NOV investors should pay attention to a decrease in hedge fund interest in recent months. There were 49 hedge funds in our database with NOV positions at the end of the previous quarter.

To the average investor, there are many metrics investors can use to track their holdings. Two of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top money managers can beat the S&P 500 by a healthy amount (see just how much).

National-Oilwell Varco, Inc. (NYSE:NOV)Just as beneficial, positive insider trading activity is a second way to break down the investments you’re interested in. As the old adage goes: there are many reasons for an upper level exec to cut shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this method if “monkeys” know where to look (learn more here).

Consequently, let’s take a glance at the key action encompassing National-Oilwell Varco, Inc. (NYSE:NOV).

What have hedge funds been doing with National-Oilwell Varco, Inc. (NYSE:NOV)?

Heading into 2013, a total of 43 of the hedge funds we track were long in this stock, a change of -12% from the previous quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were boosting their stakes substantially.

According to our comprehensive database, Berkshire Hathaway, managed by Warren Buffett, holds the most valuable position in National-Oilwell Varco, Inc. (NYSE:NOV). Berkshire Hathaway has a $362 million position in the stock, comprising 0.5% of its 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $154 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Sean Cullinan’s Point State Capital, Jason Capello’s Merchants’ Gate Capital and Keith Meister’s Corvex Capital.

Since National-Oilwell Varco, Inc. (NYSE:NOV) has experienced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of funds who sold off their full holdings at the end of the year. Intriguingly, Jason Capello’s Merchants’ Gate Capital sold off the largest stake of the 450+ funds we track, worth close to $189 million in call options, and Donald Chiboucis of Columbus Circle Investors was right behind this move, as the fund cut about $71 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 6 funds at the end of the year.

What do corporate executives and insiders think about National-Oilwell Varco, Inc. (NYSE:NOV)?

Insider buying is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the last 180-day time period, National-Oilwell Varco, Inc. (NYSE:NOV) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

With the results demonstrated by our strategies, everyday investors should always pay attention to hedge fund and insider trading sentiment, and National-Oilwell Varco, Inc. (NYSE:NOV) is an important part of this process.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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