National-Oilwell Varco, Inc. (NOV) Insiders Are Buying, Should You?

National-Oilwell Varco, Inc. (NYSE:NOV) is one of the most highly regarded long-term energy plays out there. How are hedgies and insiders playing it?

Now, according to many market players, hedge funds are viewed as delayed, old financial vehicles 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 crème de la crème of this club, close to 525 funds. Analysts calculate that this group has its hands on most of all hedge funds' total assets, and by keeping an eye on their highest performing investments, we've spotted a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outperformed 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 33 percentage points in 11 months (explore the details and some picks here).

Just as necessary, optimistic insider trading sentiment is another way to look at the marketplace. Just as you'd expect, there are a number of reasons for an upper level exec to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the market-beating potential of this method if piggybackers understand where to look (learn more here).

Furthermore, we're going to analyze the recent info surrounding National-Oilwell Varco, Inc. (NYSE:NOV).



How are hedge funds trading National-Oilwell Varco, Inc. (NYSE:NOV)?


At the end of the second quarter, a total of 43 of the hedge funds we track held long positions in this stock, a change of -9% from the first quarter. With the smart money's positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their holdings considerably.

National-Oilwell Varco, Inc. (NYSE:NOV)When using filings from the hedgies we track, Harris Associates, managed by Natixis Global Asset Management, holds the most valuable position in National-Oilwell Varco, Inc. (NYSE:NOV). Harris Associates has a $1.1933 billion position in the stock, comprising 2.5% of its 13F portfolio. Sitting at the No. 2 spot is Warren Buffett of Berkshire Hathaway, with a $611.8 million position; 0.7% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Jason Capello's Merchants' Gate Capital, Matt McLennan's First Eagle Investment Management and Lee Ainslie's Maverick Capital.


Due to the fact National-Oilwell Varco, Inc. (NYSE:NOV) has experienced bearish sentiment from the top-tier hedge fund industry, it's easy to see that there was a specific group of funds who were dropping their full holdings at the end of the second quarter. It's worth mentioning that Andreas Halvorsen's Viking Global dropped the largest position of the "upper crust" of funds we watch, worth an estimated $188.1 million in call options., and Sean Cullinan of Point State Capital was right behind this move, as the fund said goodbye to about $123.8 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 4 funds at the end of the second quarter.


How have insiders been trading National-Oilwell Varco, Inc. (NYSE:NOV)?


Legal insider trading, particularly when it's bullish, is most useful when the company in focus has seen transactions within the past 180 days. Over the latest half-year time period, National-Oilwell Varco, Inc. (NYSE:NOV) has seen 1 unique insiders purchasing, and 1 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 National-Oilwell Varco, Inc. (NYSE:NOV). These stocks are Weatherford International Ltd (NYSE:WFT), FMC Technologies, Inc. (NYSE:FTI), Cameron International Corporation (NYSE:CAM), Baker Hughes Incorporated (NYSE:BHI), and Halliburton Company (NYSE:HAL). This group of stocks belong to the oil & gas equipment & services industry and their market caps match NOV's market cap.

Company Name
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling

Weatherford International Ltd (NYSE:WFT)
28
1
3

FMC Technologies, Inc. (NYSE:FTI)
16
0
5

Cameron International Corporation (NYSE:CAM)
33
0
5

Baker Hughes Incorporated (NYSE:BHI)
32
0
5

Halliburton Company (NYSE:HAL)
62
0
9

Using the returns explained by Insider Monkey's research, regular investors must always pay attention to hedge fund and insider trading sentiment, and National-Oilwell Varco, Inc. (NYSE:NOV) is an important part of this process.

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