Do Hedge Funds Love Exxon Mobil Corporation (XOM)?

Is Exxon Mobil Corporation (NYSE:XOM) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They fail miserably sometimes, but historically their consensus stock picks outperformed the market after adjusting for known risk factors.

Exxon Mobil Corporation (NYSE:XOM) was in 68 hedge funds’ portfolios at the end of December. XOM investors should be aware of an increase in support from the world’s most elite money managers in recent months. There were 61 hedge funds in our database with XOM positions at the end of the previous quarter. At the end of this article we will also compare XOM to other stocks including Amazon.com, Inc. (NASDAQ:AMZN), General Electric Company (NYSE:GE), and Facebook Inc (NASDAQ:FB) to get a better sense of its popularity.

In the 21st century investor’s toolkit there are several gauges stock traders put to use to value their holdings. A duo of the most innovative gauges are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the elite hedge fund managers can beat their index-focused peers by a healthy margin (see the details here).

Since the beginning of 2015, Exxon’s stock has inched up by 5.60% and investors for the past several months have been watching the company closely as the decline in oil prices sparked fears that big oil companies, such as Exxon, might cut their dividends. However, last week, the company announced plans to cut its capital expenditure by 25% to $23 billion. The reductions will come mainly from oil and gas production, but the company also expects small decreases in capital expenditures from its chemicals business next year.

With the decline in oil prices, the cut in CapEx were received positively by investors, especially since the company also assured that it is going to focus on growing its dividend payments.

Over the last 52 weeks, Exxon’s stock has inched down by just 3%, which shows the stock’s resilience to the more dramatic drop in oil prices.

Now, let’s take a look at the latest action encompassing Exxon Mobil Corporation (NYSE:XOM).

Hedge fund activity in Exxon Mobil Corporation (NYSE:XOM)

At the end of the fourth quarter, a total of 68 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Pzena Investment Management, managed by Richard S. Pzena, holds the largest position in Exxon Mobil Corporation (NYSE:XOM). Pzena Investment Management has a $473.4 million position in the stock, comprising 2.9% of its 13F portfolio. Coming in second is Fisher Asset Management, led by Ken Fisher, which holds a $419.8 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions consist of Donald Yacktman’s Yacktman Asset Management, and Phill Gross and Robert Atchinson’s Adage Capital Management.

With a general bullishness amongst the heavyweights, some big names have jumped into Exxon Mobil Corporation (NYSE:XOM) headfirst. 0, managed by Benjamin A. Smith, initiated the largest call position in Exxon Mobil Corporation (NYSE:XOM). Laurion Capital Management had $108.4 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $102.7 million investment in the stock during the quarter. The following funds were also among the new XOM investors: Jorge Paulo Lemann’s 0, Benjamin A. Smith’s 0, and Clint Carlson’s 0.

Let’s now take a look at hedge fund activity in other stocks similar to Exxon Mobil Corporation (NYSE:XOM). We will take a look at Amazon.com, Inc. (NASDAQ:AMZN), General Electric Company (NYSE:GE), Facebook Inc (NASDAQ:FB), and Johnson & Johnson (NYSE:JNJ). This group of stocks’ market caps are similar to XOM’s market cap.

As you can see these stocks had an average of 103.25 hedge funds with bullish positions and the average amount invested in these stocks was $9503 million. That figure was $3081 million in XOM’s case. Facebook Inc (NASDAQ:FB) is the most popular stock in this table. On the other hand General Electric Company (NYSE:GE) is the least popular one with only 54 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. In this regard FB might be a better candidate to consider a long position.