Do You Think Nabors Industries Ltd. (NBR) is an Attractive Risk-Reward Opportunity?
Miller Value Partners, an investment management company, released its “Deep Value Strategy” fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the Deep Value Strategy was up 34%, compared to a 13.49% gain for the S&P 1500 Value Index. Investment in Value and cyclical stocks favored the strategy in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Miller Value Deep Value Strategy highlighted stocks Nabors Industries Ltd. (NYSE:NBR) in the Q4 2022 investor letter. Headquartered in Hamilton, Bermuda, Nabors Industries Ltd. (NYSE:NBR) is a drilling and drilling-related services provider. On February 2, 2023, Nabors Industries Ltd. (NYSE:NBR) stock closed at $168.72 per share. One-month return of Nabors Industries Ltd. (NYSE:NBR) was 11.01%, and its shares gained 42.56% of their value over the last 52 weeks. Nabors Industries Ltd. (NYSE:NBR) has a market capitalization of $1.589 billion.
Miller Value Deep Value Strategy made the following comment about Nabors Industries Ltd. (NYSE:NBR) in its Q4 2022 investor letter:
"The two largest positive contributors were Nabors Industries Ltd. (NYSE:NBR) and Quad Graphics (QUAD), holdings that were up more than 50% net of fees. Nabors remains an attractive energy service public LBO with significant value unlock potential from ongoing debt reduction. The company is well positioned to benefit from strong ongoing demand in their global high spec rig fleet. We believe the marketplace is overlooking the very positive supply/demand environment for the energy service sector leading to high asset utilization and significant pricing power. Nabors’s proprietary technology and efforts to scale up their energy transition efforts has the potential to create significant incremental value for the company that does not seem to be reflected in the current share price. We believe the company remains an extremely attractive reward/risk opportunity, closing the year at $3.00/share (pre reverse split) and is still at a greater than 60% valuation discount to peers, 2x cash flow, and normalized free cash flow yield near 40%."
Nabors Industries Ltd. (NYSE:NBR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Nabors Industries Ltd. (NYSE:NBR) at the end of the third quarter which was 24 in the previous quarter.
We discussed Nabors Industries Ltd. (NYSE:NBR) in another article and shared Miller Value Partners' views on the company. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
Disclosure: None. This article is originally published at Insider Monkey.