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Here is What Hedge Funds Think About Exxon Mobil Corporation (XOM)

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  • XOM

After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Exxon Mobil Corporation (NYSE:XOM).

Exxon Mobil Corporation (NYSE:XOM) was in 64 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 68. XOM investors should be aware of a decrease in hedge fund interest of late. There were 68 hedge funds in our database with XOM positions at the end of the second quarter. Our calculations also showed that XOM isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let's review the recent hedge fund action surrounding Exxon Mobil Corporation (NYSE:XOM).

Richard Pzena - Pzena Investment Management
Richard Pzena - Pzena Investment Management

Richard S. Pzena of Pzena Investment Management

Do Hedge Funds Think XOM Is A Good Stock To Buy Now?

At Q3's end, a total of 64 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards XOM over the last 25 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Exxon Mobil Corporation (NYSE:XOM) was held by GQG Partners, which reported holding $1563.9 million worth of stock at the end of September. It was followed by Fisher Asset Management with a $516.1 million position. Other investors bullish on the company included Adage Capital Management, Citadel Investment Group, and Pzena Investment Management. In terms of the portfolio weights assigned to each position Engine No. 1 LLC allocated the biggest weight to Exxon Mobil Corporation (NYSE:XOM), around 14.22% of its 13F portfolio. Inclusive Capital is also relatively very bullish on the stock, earmarking 10.77 percent of its 13F equity portfolio to XOM.

Since Exxon Mobil Corporation (NYSE:XOM) has experienced falling interest from the aggregate hedge fund industry, it's easy to see that there was a specific group of money managers who sold off their full holdings in the third quarter. At the top of the heap, William Harnisch's Peconic Partners LLC cut the biggest stake of all the hedgies followed by Insider Monkey, valued at an estimated $25.2 million in stock. Frank Brosens's fund, Taconic Capital, also dropped its stock, about $15.8 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 4 funds in the third quarter.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Exxon Mobil Corporation (NYSE:XOM) but similarly valued. These stocks are Toyota Motor Corporation (NYSE:TM), Pfizer Inc. (NYSE:PFE), Oracle Corporation (NYSE:ORCL), NIKE, Inc. (NYSE:NKE), Cisco Systems, Inc. (NASDAQ:CSCO), The Coca-Cola Company (NYSE:KO), and Thermo Fisher Scientific Inc. (NYSE:TMO). This group of stocks' market valuations are closest to XOM's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TM,10,876130,-2 PFE,74,2662716,7 ORCL,56,3473487,1 NKE,70,5682126,3 CSCO,63,3937668,3 KO,61,25137199,-1 TMO,94,8210112,7 Average,61.1,7139920,2.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 61.1 hedge funds with bullish positions and the average amount invested in these stocks was $7140 million. That figure was $4640 million in XOM's case. Thermo Fisher Scientific Inc. (NYSE:TMO) is the most popular stock in this table. On the other hand Toyota Motor Corporation (NYSE:TM) is the least popular one with only 10 bullish hedge fund positions. Exxon Mobil Corporation (NYSE:XOM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for XOM is 61.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately XOM wasn't nearly as popular as these 5 stocks and hedge funds that were betting on XOM were disappointed as the stock returned 3.1% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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