Is Noble Corporation (NYSE:NE) a good buy?
In the eyes of many traders, hedge funds are perceived as useless, outdated investment tools of a period lost to current times. Although there are more than 8,000 hedge funds with their doors open today, this site aim at the moguls of this club, about 525 funds. It is widely held that this group has its hands on the lion’s share of all hedge funds’ total assets, and by keeping an eye on their highest quality picks, we’ve brought to light a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 outclassed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as crucial, bullish insider trading sentiment is a second way to analyze the investments you’re interested in. As the old adage goes: there are a variety of incentives for an executive to get rid of shares of his or her company, but only one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the impressive potential of this tactic if you know what to do (learn more here).
What’s more, it’s important to examine the latest info surrounding Noble Corporation (NYSE:NE).
Hedge fund activity in Noble Corporation (NYSE:NE)
At Q2’s end, a total of 43 of the hedge funds we track held long positions in this stock, a change of 19% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes significantly.
When using filings from the hedgies we track, Jeffrey Tannenbaum’s Fir Tree had the most valuable position in Noble Corporation (NYSE:NE), worth close to $418.4 million, comprising 5.8% of its total 13F portfolio. The second largest stake is held by David Gallo of Valinor Management LLC, with a $135.4 million position; 5.6% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Frank Brosens’s Taconic Capital, Phill Gross and Robert Atchinson’s Adage Capital Management and Ken Griffin’s Citadel Investment Group.
As aggregate interest spiked, particular hedge funds have been driving this bullishness. Fir Tree, managed by Jeffrey Tannenbaum, assembled the most valuable position in Noble Corporation (NYSE:NE). Fir Tree had 418.4 million invested in the company at the end of the quarter. David Gallo’s Valinor Management LLC also made a $135.4 million investment in the stock during the quarter. The other funds with brand new NE positions are Frank Brosens’s Taconic Capital, Phill Gross and Robert Atchinson’s Adage Capital Management, and Ken Griffin’s Citadel Investment Group.
Insider trading activity in Noble Corporation (NYSE:NE)
Bullish insider trading is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time frame, Noble Corporation (NYSE:NE) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to Noble Corporation (NYSE:NE). These stocks are ENSCO PLC (NYSE:ESV), Cheniere Energy, Inc. (NYSEAMEX:LNG), Markwest Energy Partners LP (NYSE:MWE), Concho Resources Inc. (NYSE:CXO), and Diamond Offshore Drilling Inc (NYSE:DO). This group of stocks are in the oil & gas drilling & exploration industry and their market caps match NE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| ENSCO PLC (NYSE:ESV) | 30 | 1 | 12 |
| Cheniere Energy, Inc. (NYSEAMEX:LNG) | 40 | 0 | 8 |
| Markwest Energy Partners LP (NYSE:MWE) | 13 | 0 | 5 |
| Concho Resources Inc. (NYSE:CXO) | 27 | 1 | 4 |
| Diamond Offshore Drilling Inc (NYSE:DO) | 17 | 0 | 1 |
Using the returns explained by our strategies, average investors must always pay attention to hedge fund and insider trading sentiment, and Noble Corporation (NYSE:NE) shareholders fit into this picture quite nicely.
