Hedge Funds Are Betting On Nabors Industries Ltd. (NBR)

Is Nabors Industries Ltd. (NYSE:NBR) a cheap stock to buy now? The best stock pickers are turning bullish. The number of bullish hedge fund positions increased by 11 lately.

If you’d ask most investors, hedge funds are viewed as worthless, old financial vehicles of years past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey look at the aristocrats of this group, about 450 funds. It is widely believed that this group oversees the majority of the smart money’s total capital, and by tracking their best equity investments, we have unsheathed a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as integral, positive insider trading sentiment is another way to parse down the financial markets. As the old adage goes: there are a variety of stimuli for an executive to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the impressive potential of this strategy if you know what to do (learn more here).

With all of this in mind, let’s take a look at the key action encompassing Nabors Industries Ltd. (NYSE:NBR).

What does the smart money think about Nabors Industries Ltd. (NYSE:NBR)?

In preparation for this quarter, a total of 33 of the hedge funds we track were bullish in this stock, a change of 50% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings considerably.

According to our comprehensive database, Cliff Asness’s AQR Capital Management had the largest position in Nabors Industries Ltd. (NYSE:NBR), worth close to $63.6 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Regiment Capital, managed by Timothy S. Peterson, which held a $41 million call position; 8.9% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include Michael Messner’s Seminole Capital (Investment Mgmt), Israel Englander’s Millennium Management and Anthony Bozza’s Lakewood Capital Management.

As aggregate interest increased, specific money managers were leading the bulls’ herd. AQR Capital Management, managed by Cliff Asness, created the largest position in Nabors Industries Ltd. (NYSE:NBR). AQR Capital Management had 63.6 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also made a $14.4 million investment in the stock during the quarter. The other funds with brand new NBR positions are Louis Bacon’s Moore Global Investments, Charles Clough’s Clough Capital Partners, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Insider trading activity in Nabors Industries Ltd. (NYSE:NBR)

Insider buying is most useful when the company in focus has experienced transactions within the past half-year. Over the last 180-day time period, Nabors Industries Ltd. (NYSE:NBR) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Nabors Industries Ltd. (NYSE:NBR). These stocks are Patterson-UTI Energy, Inc. (NASDAQ:PTEN), Whiting Petroleum Corp (NYSE:WLL), QEP Resources Inc (NYSE:QEP), Penn West Petroleum Ltd (USA) (NYSE:PWE), and Rowan Companies PLC (NYSE:RDC). This group of stocks are in the oil & gas drilling & exploration industry and their market caps are closest to NBR’s market cap.