Hedge Funds Miller Value and Värde Partners Love Nabors Industries’ Cheap Shares, Deleveraging, and Saudi Aramco JV

Subtitle: May your investment not be rigged — and your portfolio not be bored

Nabors Industries (NYSE: NBR)
$64.70 ▲ +6.77%
As of Jan 8, 2026 · 4:10 PM ET

🎯 FunStock Index™: 8.5 / 10
Deep value, real cash flow, heavy leverage getting lighter. Cyclical, geopolitical, but increasingly disciplined.

🛢️ The Setup: Old-School Drilling, New-School Discipline

Think of Nabors as the “Tesla-meets-Tonka-Truck” of drilling.

Yes, it runs rigs across the U.S. and internationally — but the real edge is technology. Nabors builds and deploys automated drilling systems, robotic tools, and real-time software that tell rigs where to drill, how to steer, and when to adjust — live, on the fly.

Its digital platforms (like RigCLOUD and ROCKit) turn drilling into a data-driven operation, while its hardware — top drives, robotic catwalks, and downhole tools — does the heavy lifting.

Bottom line: Nabors doesn’t just drill holes.
It optimizes them.

Nabors Industries may not have always screamed “sexy,” though. This is a company that spent years being punished for excess leverage, cyclical pain, and energy-market mood swings. And yet — quietly — something changed.

Debt came down.
Cash flow stabilized.
International margins rose.
Saudi Aramco entered the room.

And suddenly, some very serious money started paying attention.

🔥 Trigger #1: Bill Miller & Värde Partners Are Loading Up

When Bill Miller shows up near the top of a cap table, it’s rarely accidental. Miller Value Partners made Nabors its largest portfolio position (~12.4%), increasing shares by nearly 8% in Q3 2025.

Even more telling?
Värde Partners, a distressed-credit specialist founded by former Cargill executives, is the largest single shareholder.

Translation:

This isn’t momentum money.
This is “we like the downside protection and the upside asymmetry” money.

Value investors don’t buy oil drillers for vibes. They buy them for math.

🏦 Trigger #2: Institutions Own… More Than 100%?

Yes, you read that right.

📊 Institutional ownership exceeds 102% of shares outstanding
📈 Float ownership: ~107%

That’s what happens when:

• Hedge funds

• Credit specialists

• Long-only giants (BlackRock, Vanguard)

• Distressed and event-driven players

…all decide the same thing at once.

If sentiment shifts even slightly positive, supply gets tight fast.

For Nabors Industries (NBR)’s Institutional Ownership breakdown, 🔍 see here.

🐻 Trigger #3: Shorts Are Still Hanging Around

Short interest sits at ~13.4%, with ~5 days to cover.

That’s not meme-stock territory — but it’s enough skepticism to act as fuel if:

• earnings surprise

• leverage drops further

• analysts start upgrading instead of shrugging

Shorts aren’t insane here — but they are crowded.

💰 Trigger #4: Valuation That Screams “Still Hated”

Let’s talk numbers — because Nabors trades like a company no one trusts yet:

• Trailing P/E: ~6

• EV / EBITDA: ~2.1

• EV / Revenue: < 1

• Price / Sales: ~0.27

That’s not optimism pricing.
That’s “prove it again” pricing.

For a business that just:

• delevered materially

• upgraded its credit

• strengthened international margins

…this is classic value-before-re-rating territory.

🧨 Trigger #5: Quail Tools Sale = Balance Sheet Reset

The sale of Quail Tools for $625M was the turning point.

What Nabors did with the proceeds matters more than the headline:

✔️ Paid down ~$330M in debt
✔️ Reduced net debt to the lowest level in over a decade
✔️ Cut annual interest expense by ~$45M
✔️ Improved free cash flow dollar-for-dollar

This wasn’t financial engineering.
This was financial cleanup.

🌍 Trigger #6: The Saudi Aramco SANAD JV = Hidden Optionality

The SANAD joint venture with Saudi Aramco is Nabors’ quiet crown jewel.

So far:

• 13 newbuild rigs deployed

• More scheduled for 2026

• Daily margins approaching $18K+ internationally

Saudi contracts mean:

• long duration

• predictable cash flow

• geopolitical insulation from U.S. shale whiplash

Optionality doesn’t always show up in near-term EPS — but it absolutely shows up in multiples.

📈 Trigger #7: Operations Are Actually Improving

Strip out the one-time Quail gain, and Q3 still showed progress:

• International drilling margins ↑

• Parker Wellbore synergies accelerating

• Alaska & offshore outperforming guidance

• Technology upgrades (PACE-X Ultra™ rigs) beating expectations

Beneath the balance-sheet clean-up, operations are quietly improving.
For the first nine months of 2025, total revenue rose to $2.41B from $2.23B, while Adjusted EBITDA climbed to $691M from $661M, and adjusted operating income increased to $201M from $184M.
Not explosive growth — but steady progress where it matters most: the engine room.

This isn’t a turnaround story anymore.
It’s a repair-then-optimize story.

 👉 Want the full picture? Dive into Nabors Industries (NBR)’s financials here.

🧠 Analyst Sentiment: Still Skeptical (Perfect)

Wall Street consensus remains mostly “Hold / Neutral.”

That’s good.

Because upgrades — especially after credit-rating improvements — tend to:

1. Lag reality

2. Chase price

3. Add fuel late

Skepticism is what keeps upside intact.

⚠️ Risks (Yes, They’re Real)

Let’s not romanticize drilling rigs:

• High leverage (though falling)

• Oil & gas cyclicality

• U.S. onshore softness

• Mexico (PEMEX) collection delays

• Long-term energy transition headwinds

This is not a sleep-well-forever stock.
It’s a calculated discomfort stock.

🧠 FUNanc1al Take

Nabors looks like a company that:

• survived the hard part

• learned fiscal discipline

• gained a powerful international partner

• hasn’t been forgiven yet

That’s often where returns live.

✅ Quick Take / TL;DR

• Major hedge funds are heavily invested

• Institutions own >100% of the float

• Valuation remains cheap

• Debt is coming down fast

• Saudi Aramco JV adds long-term optionality

• Still cyclical, still risky — but far less fragile

❓ FAQ

Q: Is this an oil price bet?
Partially — but international contracts reduce volatility.

Q: Is leverage still a concern?
Yes, but it’s declining rapidly and credit ratings just improved.

Q: Why hasn’t the stock already rerated?
Because trust rebuilds slowly. That’s often the opportunity.

Q: Dividend?
Not the point here. Cash flow + deleveraging come first.

✍️ About the Author

Frédéric Marsanne is the founder of FUNanc1al — part market analyst, part storyteller, part accidental comedian. A longtime investor, entrepreneur, and venture-builder across tech, biotech, and fintech, he blends sharp insights with humor to help readers laugh, learn, live better lives, and invest a little wiser. When not decoding insider buys or poking fun at earnings calls, he’s building Cl1Q, writing fiction, painting, or discovering new passions to FUNalize.

🧾⚠️📢 Fun(anc1al) but Serious Disclaimer: 🧾⚠️📢

This article blends research and entertainment — not prescriptions or financial advice. Investing involves risk, including loss of principal.

We laugh, we analyze, we meme. 
We’re FUNancial advisors — not financial advisors. 😄📉📈
Consult a qualified financial professional if you must.

May your investment not be rigged — and your portfolio not be bored.
Invest at your own risk. Love at any pace. Laugh at every turn. 😄
Be Happy. 😄😄

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