Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards National Oilwell Varco, Inc. (NYSE:NOV) changed recently.
Is National Oilwell Varco, Inc. (NYSE:NOV) a buy here? Hedge funds were in a bullish mood. The number of bullish hedge fund positions went up by 4 recently. National Oilwell Varco, Inc. (NYSE:NOV) was in 34 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 33. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that NOV isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 30 hedge funds in our database with NOV positions at the end of the second quarter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s view the new hedge fund action regarding National Oilwell Varco, Inc. (NYSE:NOV).
Do Hedge Funds Think NOV Is A Good Stock To Buy Now?
At the end of September, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the previous quarter. The graph below displays the number of hedge funds with bullish position in NOV over the last 25 quarters. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
The largest stake in National Oilwell Varco, Inc. (NYSE:NOV) was held by Pzena Investment Management, which reported holding $534.9 million worth of stock at the end of September. It was followed by Oldfield Partners with a $103.4 million position. Other investors bullish on the company included Contrarius Investment Management, Holocene Advisors, and Masters Capital Management. In terms of the portfolio weights assigned to each position Oldfield Partners allocated the biggest weight to National Oilwell Varco, Inc. (NYSE:NOV), around 11.08% of its 13F portfolio. Mountain Lake Investment Management is also relatively very bullish on the stock, designating 4.67 percent of its 13F equity portfolio to NOV.
Consequently, key hedge funds were breaking ground themselves. Holocene Advisors, managed by Brandon Haley, initiated the largest position in National Oilwell Varco, Inc. (NYSE:NOV). Holocene Advisors had $47.9 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also initiated a $2.2 million position during the quarter. The other funds with brand new NOV positions are Steve Cohen’s Point72 Asset Management, Jinghua Yan’s TwinBeech Capital, and Peter Algert’s Algert Global.
Let’s now take a look at hedge fund activity in other stocks similar to National Oilwell Varco, Inc. (NYSE:NOV). These stocks are Unum Group (NYSE:UNM), MAXIMUS, Inc. (NYSE:MMS), NCR Corporation (NYSE:NCR), American National Group Inc. (NASDAQ:ANAT), Tuya Inc. (NYSE:TUYA), MGIC Investment Corporation (NYSE:MTG), and Certara, Inc. (NASDAQ:CERT). This group of stocks’ market valuations are closest to NOV’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UNM | 30 | 350040 | 7 |
| MMS | 14 | 89836 | -12 |
| NCR | 28 | 517584 | -10 |
| ANAT | 16 | 93762 | -4 |
| TUYA | 11 | 71032 | 3 |
| MTG | 27 | 298208 | 0 |
| CERT | 15 | 170457 | 8 |
| Average | 20.1 | 227274 | -1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.1 hedge funds with bullish positions and the average amount invested in these stocks was $227 million. That figure was $983 million in NOV’s case. Unum Group (NYSE:UNM) is the most popular stock in this table. On the other hand Tuya Inc. (NYSE:TUYA) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks National Oilwell Varco, Inc. (NYSE:NOV) is more popular among hedge funds. Our overall hedge fund sentiment score for NOV is 89. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately NOV wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NOV were disappointed as the stock returned -9.1% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Nov Inc. (NYSE:NOV)
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Disclosure: None. This article was originally published at Insider Monkey.
