Shares of NOV, Inc. (NOV) have climbed 17.6% so far this year. The company provides components and products for the drilling and production of oil and gas, as well as industrial and renewable energy sectors. NOV’s recent fourth-quarter numbers were a mixed bag, with its top-line outperforming the Street’s expectations.
Revenue increased 14.3% year-over-year to $1.52 billion, outperforming estimates by $54.9 million. This growth was driven by improved activity in oil, gas, and offshore wind power, as well as higher customer demand. Net loss per share at $0.08, was wider than estimates by $0.05. Continuing challenges in the supply chain affected NOV’s margins during this period.
Management noted it is focusing on improving margins via higher pricing, increasing revenue from proprietary technologies, and better execution amid present supply chain constraints.
With these developments in mind, let us take a look at the changes in NOV’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, NOV’s top risk category is Legal & Regulatory, contributing 7 of the total 18 risks identified for the stock, compared to a sector average of 6 risk factors under the same category.
In its recent report, the company has added one key risk factor under the Legal & Regulatory risk category.
NOV highlighted that it is subject to taxes in the U.S. and various jurisdictions where it operates. These tax rates may change owing to economic and political conditions. Factors such as increased tax rates, changes in the company’s ability to realize its deferred tax assets, or negative outcomes from examinations of its tax returns could negatively impact NOV.
Additionally, the adoption of new tax legislation or exposure to additional tax liabilities could also adversely impact NOV’s business and financials.
Hedge Fund Activity
According to TipRanks data, the Wall Street’s top hedge funds have increased holdings in NOV by one million shares in the last quarter, indicating a positive hedge fund confidence signal in the stock based on activities of 9 hedge funds. Notably, George Davis Jr’s Hotchkis & Wiley Capital Management has a holding worth $382 million in NOV.
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