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Hedge Funds Have Never Been Less Bullish On Exxon Mobil Corporation (XOM)

Abigail Fisher

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Exxon Mobil Corporation (NYSE:XOM).

Exxon Mobil Corporation (NYSE:XOM) investors should be aware of a decrease in activity from the world's largest hedge funds of late. XOM was in 48 hedge funds' portfolios at the end of September. There were 50 hedge funds in our database with XOM holdings at the end of the previous quarter. Our calculations also showed that XOM isn't among the 30 most popular stocks among hedge funds.

To the average investor there are numerous indicators stock traders can use to analyze publicly traded companies. A pair of the less utilized indicators are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform the broader indices by a significant margin (see the details here).

[caption id="attachment_221324" align="aligncenter" width="450"] Donald Yacktman of Yacktman Asset Management[/caption]

Donald Yacktman of Yacktman Asset Management

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let's take a peek at the new hedge fund action surrounding Exxon Mobil Corporation (NYSE:XOM).

How have hedgies been trading Exxon Mobil Corporation (NYSE:XOM)?

At Q3's end, a total of 48 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards XOM over the last 17 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

XOM_nov2019

More specifically, Fisher Asset Management was the largest shareholder of Exxon Mobil Corporation (NYSE:XOM), with a stake worth $466.1 million reported as of the end of September. Trailing Fisher Asset Management was Pzena Investment Management, which amassed a stake valued at $176 million. Yacktman Asset Management, Adage Capital Management, and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Lucas Capital Management allocated the biggest weight to Exxon Mobil Corporation (NYSE:XOM), around 2.58% of its portfolio. Yacktman Asset Management is also relatively very bullish on the stock, setting aside 1.99 percent of its 13F equity portfolio to XOM.

Seeing as Exxon Mobil Corporation (NYSE:XOM) has witnessed bearish sentiment from hedge fund managers, it's safe to say that there lies a certain "tier" of funds that elected to cut their entire stakes heading into Q4. Intriguingly, Matthew Tewksbury's Stevens Capital Management cut the biggest stake of all the hedgies followed by Insider Monkey, comprising an estimated $7.1 million in stock. Ilan Assouline's fund, Circle Road Advisors, also sold off its stock, about $6.5 million worth. These transactions are interesting, as total hedge fund interest fell by 2 funds heading into Q4.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Exxon Mobil Corporation (NYSE:XOM) but similarly valued. These stocks are AT&T Inc. (NYSE:T), Mastercard Incorporated (NYSE:MA), Bank of America Corporation (NYSE:BAC), and The Home Depot, Inc. (NYSE:HD). This group of stocks' market valuations are similar to XOM's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position T,46,1515476,4 MA,114,13206727,15 BAC,95,32049756,1 HD,60,4349926,7 Average,78.75,12780471,6.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 78.75 hedge funds with bullish positions and the average amount invested in these stocks was $12780 million. That figure was $1365 million in XOM's case. Mastercard Incorporated (NYSE:MA) is the most popular stock in this table. On the other hand AT&T Inc. (NYSE:T) is the least popular one with only 46 bullish hedge fund positions. Exxon Mobil Corporation (NYSE:XOM) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately XOM wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); XOM investors were disappointed as the stock returned -0.6% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.

Disclosure: None. This article was originally published at Insider Monkey.

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