In the eyes of many market players, hedge funds are assumed to be bloated, old financial tools of a forgotten age. Although there are more than 8,000 hedge funds trading in present day, Insider Monkey looks at the crème de la crème of this club, close to 525 funds. It is widely held that this group has its hands on the lion’s share of the smart money’s total capital, and by keeping an eye on their best investments, we’ve spotted a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as useful, optimistic insider trading sentiment is another way to analyze the financial markets. As the old adage goes: there are many reasons for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).
Furthermore, let’s examine the recent info for Nabors Industries Ltd. (NYSE:NBR).
How have hedgies been trading Nabors Industries Ltd. (NYSE:NBR)?
At Q2’s end, a total of 30 of the hedge funds we track were long in this stock, a change of -9% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully.
When using filings from the hedgies we track, Clifton S. Robbins’s Blue Harbour Group had the most valuable position in Nabors Industries Ltd. (NYSE:NBR), worth close to $81.3 million, accounting for 6.2% of its total 13F portfolio. Coming in second is Regiment Capital, managed by Timothy S. Peterson, which held a $45.9 million call position; 13% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include Cliff Asness’s AQR Capital Management, Anthony Bozza’s Lakewood Capital Management and Abby Flamholz and Yehuda Blinder’s ADAR Investment Management.
Since Nabors Industries Ltd. (NYSE:NBR) has faced declining interest from the smart money’s best and brightest, it’s easy to see that there is a sect of money managers who sold off their positions entirely heading into Q2. Intriguingly, Paul Marshall and Ian Wace’s Marshall Wace LLP sold off the largest investment of the 450+ funds we watch, totaling about $4.2 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dropped its stock, about $3.2 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds heading into Q2.
How are insiders trading Nabors Industries Ltd. (NYSE:NBR)?
Insider buying made by high-level executives is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the last six-month time frame, Nabors Industries Ltd. (NYSE:NBR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators 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 belong to the oil & gas drilling & exploration industry and their market caps are closest to NBR’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Patterson-UTI Energy, Inc. (NASDAQ:PTEN) | 25 | 0 | 0 |
| Whiting Petroleum Corp (NYSE:WLL) | 36 | 0 | 0 |
| QEP Resources Inc (NYSE:QEP) | 24 | 0 | 0 |
| Penn West Petroleum Ltd (USA) (NYSE:PWE) | 14 | 0 | 0 |
| Rowan Companies PLC (NYSE:RDC) | 25 | 0 | 0 |
Using the returns explained by Insider Monkey’s research, regular investors must always keep one eye on hedge fund and insider trading activity, and Nabors Industries Ltd. (NYSE:NBR) applies perfectly to this mantra.
