Why One Hedge Fund Boosted Its $15 Million NESR Stake Amid a Steep Stock Surge

Florida-based GeoSphere Capital Management reported in its Form 13F filed on November 14 that it increased its position in National Energy Services Reunited Corp. by 481,228 shares during the third quarter, resulting in a $9.2 million increase in position value.

What Happened

According to a Securities and Exchange Commission (SEC) filing dated November 14, GeoSphere Capital Management increased its stake in National Energy Services Reunited Corp. (NASDAQ:NESR) by 481,228 shares during the third quarter. The fund’s NESR position rose to nearly 1.5 million shares with a market value of $15.3 million as of September 30.

What Else to Know

The buy lifted NESR to 11.6% of GeoSphere’s 13F reportable AUM, making it the fund’s largest position as of quarter-end.

Top holdings after the filing:

• NASDAQ: NESR: $15.3 million (11.7% of AUM)
• NYSE: BKV: $6.5 million (4.9% of AUM)
• NYSE: CCJ: $5.7 million (4.4% of AUM)
• NYSE: SEI: $5.6 million (4.3% of AUM)
• NYSE: CVE: $5.4 million (4.2% of AUM)

As of Thursday, NESR shares were priced at $14.72, up 67% over the past year and well outperforming the S&P 500, which is up nearly 13% in the same period.

Company Overview

Company Snapshot

• NESR offers a comprehensive portfolio of oilfield services, including hydraulic fracturing, coiled tubing, cementing, drilling, and evaluation services, as well as production assurance chemicals and water management solutions.
• The firm generates revenue primarily through service contracts and equipment rentals for oil and gas companies operating in the Middle East, North Africa, and Asia Pacific regions.
• It serves major oil and gas producers, national oil companies, and independent operators seeking advanced field services and integrated solutions.

National Energy Services Reunited Corp. is a leading provider of oilfield services with a strong presence across key energy-producing regions. The company leverages an integrated service model to address complex production and drilling needs, enabling clients to optimize operational efficiency. Its diversified offerings and regional expertise position it competitively within the oil and gas equipment and services industry.

Foolish Take

Even after a sharp rally, this move signals that GeoSphere is leaning into a business showing improving fundamentals rather than chasing momentum. For long-term investors, that matters: NESR just delivered sequential net income growth despite a tough operating backdrop, and its balance sheet remains in solid shape. Management also highlighted major contract wins—most notably the massive Saudi Jafurah integrated frac award—which could reshape the company’s growth profile over the next several years.

According to the fund’s latest SEC filing, GeoSphere increased its NESR position by 481,228 shares, lifting the stake to nearly 1.5 million shares valued at $15.3 million. That brings NESR to 11.6% of the portfolio, well above the fund’s other holdings.

While NESR’s third-quarter revenue declined year-over-year, the company preserved profitability: Net income rose 16.7% sequentially to $17.7 million, adjusted EBITDA landed at $64 million with a 21.7% margin. Management also underscored an accelerating pipeline of contract awards and reiterated expectations for stronger operating cash flow in the fourth quarter as collections improve. For long-term investors, the takeaway is straightforward: NESR is volatile, but the company now has visibility into multi-year, large-scale projects that could support earnings durability. If management executes on upcoming infrastructure buildouts and margin discipline, today’s valuation could still offer upside.

Glossary

Form 13F: A quarterly report filed by institutional investment managers to disclose their equity holdings.
Reportable AUM: Assets under management that must be reported in regulatory filings, such as Form 13F.
Position: The amount of a particular security or asset held by an investor or fund.
Trailing twelve-month (TTM): The 12-month period ending with the most recent quarterly report.
Forward price-to-earnings ratio: A valuation metric comparing a company's current share price to its expected future earnings per share.
EV/EBITDA: A valuation ratio comparing a company's enterprise value to its earnings before interest, taxes, depreciation, and amortization.
Hydraulic fracturing: An oilfield technique that injects fluid into rock to release oil or gas.
Coiled tubing: A long, flexible metal pipe used in oil and gas well operations for various services.
Cementing: The process of pumping cement into a wellbore to secure the casing and isolate zones.
Production assurance chemicals: Chemicals used to maintain or enhance oil and gas production by preventing issues like corrosion or scale.
Integrated service model: A business approach offering multiple, coordinated services to address complex client needs.
Equipment rentals: Leasing specialized machinery or tools to clients for temporary use, common in oilfield services.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cameco. The Motley Fool has a disclosure policy.