NOV (NOV) Slid on Softening Oil Outlook in North America

Ariel Investments, an investment management company, released its “Ariel Appreciation Fund” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, all the major U.S. indices posted gains. The Ariel Appreciation fund rose +9.90% in the quarter, trailing the +10.08% return for the Russell Midcap Value Index and outperforming the +9.21% returns of the Russell Midcap Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Ariel Appreciation Fund highlighted stocks like NOV Inc. (NYSE:NOV) in the third quarter 2024 investor letter. NOV Inc. (NYSE:NOV) provides solutions for oil and gas drilling and production, and industrial and renewable energy sectors. The one-month return of NOV Inc. (NYSE:NOV) was -7.10%, and its shares lost 23.79% of their value over the last 52 weeks. On October 15, 2024, NOV Inc. (NYSE:NOV) stock closed at $15.70 per share with a market capitalization of $6.181 billion.

Ariel Appreciation Fund stated the following regarding NOV Inc. (NYSE:NOV) in its Q3 2024 investor letter:

“Alternatively, drilling and production equipment provider, NOV Inc. (NYSE:NOV) weighed on returns over the period despite the company’s solid business fundamentals. NOV delivered a top- and bottom-line earnings beat, highlighted by rising demand in offshore and international markets, strong backlog order conversion, effective cost controls and robust free cash flow generation. Although a softening oil outlook in North America drove management to modestly lower full year guidance, the company continues to return capital to shareholders through a recent 50% dividend hike and $1 billion share repurchase authorization. As NOV right-sizes its onshore business and grows a more efficient offshore business, we believe the market will recognize the long-term value and re-rate the shares.”

An engineer inspecting a complete set of oil and gas components.

NOV Inc. (NYSE:NOV) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held NOV Inc. (NYSE:NOV) at the end of the second quarter which was 33 in the previous quarter. While we acknowledge the potential of NOV Inc. (NYSE:NOV) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed NOV Inc. (NYSE:NOV) and shared the list of best hurricane and natural disaster stocks to buy. In addition, please check out our hedge fund investor letters Q3 2024 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.