In this article, we discuss the 5 best bear market stocks to invest in. If you wish to read our detailed analysis of bear market stocks and the current market situation, go directly to 11 Best Bear Market Stocks To Invest In.
5. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 83
Exxon Mobil Corporation (NYSE:XOM) is a Texas-based energy firm which engages in the production, transportation and sale of crude oil, natural gas, petroleum products and other petrochemicals around the globe. The company’s impressive dividend track record, as well as high valuations in the energy sector make Exxon Mobil Corporation (NYSE:XOM) one of the best bear market stocks to own. It offers a 3.56% yield as of June 7, and has increased its payout to shareholders for 39 years in a row.
For Q1 2022, Exxon Mobil Corporation (NYSE:XOM) disclosed earnings per share of $2.07, falling below analysts’ estimates by $0.16. Quarterly revenue was posted at $90.50 billion, outperforming consensus estimates by $5.62 billion and showing an increase of 53% in contrast to the same period over last year.
83 hedge funds were long Exxon Mobil Corporation (NYSE:XOM) at the close of the first quarter, with aggregate stakes worth $8.55 billion. This shows a positive trend from the preceding quarter where 71 hedge funds were stakeholders of the energy firm.
On June 3, JPMorgan analyst Phil Gresh gave Exxon Mobil Corporation (NYSE:XOM) an ‘Overweight’ rating and a $108 price target. He notes that the company is trading at a discount to rival Chevron “on essentially all important valuation metrics,” and that it “still has room” to post further gains. As of June 7, the company shares have gained 61.90% in the last 12 months, and 55.56% so far in 2022.
Investment firm Goehring & Rozencwajg Associates mentioned Exxon Mobil Corporation (NYSE:XOM) in its Q3 2021 investor letter. Here’s what the fund said:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publicly expressed concerns about both projects.
According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
