Lackluster news
While there has been some news about the company recently, it offers very little to engage the interest of potential shareholders. On April 10 Morgan Stanley reduced its rating for the company. Morgan Stanley gave Exxon Mobil Corporation (NYSE:XOM) an underweight rating down from its previous position as equal weight. Adding to this bad news, an Oppenheimer analyst also downgraded shares of Exxon Mobil Corporation (NYSE:XOM), saying that he thinks the oil and gas giant’s stock will trade in line with the S&P 500.
Meanwhile Chevron Corporation (NYSE:CVX) has been reaching new highs and providing a strong outlook. Chevron currently has an overall buy rating and is near a 5 year high while also yielding above 3%. At the same time, the company has a great dividend history, including “25 consecutive years of dividend increases.”
Looking at another competitor, ConocoPhillips (NYSE:COP) is also near a 52-week high, is yielding about 4.5%, and has a P/E under 10. Additionally, the company is currently working on increasing its reserves and production, and has a dividend history similar to Chevron.
Royal Dutch Shell currently has a dividend of over 5% and a P/E of under 8, making it perhaps the most attractive of the energy companies on the surface. However, it hasn’t seen the success of late of its competitors, and some of its recent acquisitions in Alaska appear puzzling.
Looking at the above, it appears that Chevron, Conoco, and Shell are all good potential investments. However, Chevron and Conoco are near 52-week highs and may have limited room to continue climbing. At the same time, many people are skeptical of Shell, and see other companies as more attractive. In the end, Exxon Mobil Corporation (NYSE:XOM) may be a great idea for people looking for a great investment right now.
Opinions from The Motley Fool are certainly promising. Writers Joel South and Taylor Muckerman explain Exxon’s acquisition of XTO Energy as a $40 million mistake and declare, “overpaying really hurts and when natural gas prices dropped it really has an effect on the company’s and shareholder’s value.” An uninspiring investment has become less inspiring.
A view from within
Given the poor outlook for Exxon Mobil Corporation (NYSE:XOM), why would anyone buy shares today? Furthermore who would buy shares? The answer to who is important because it gives potential investors a reason to take interest in a company that has little excitement to share: Exxon insider Patrick T. Mulva, who serves as the Vice President & Controller of the company.
As recently as March 13 2013, Mulva purchased 11,000 shares of Exxon Mobil Corporation (NYSE:XOM). 8,900 of these shares were purchased for $89 per share and the remaining 2,100 were purchased for $88.99 per share for a total cash outlay of $978,979. Some have attributed this insider transaction to growing expectations for natural gas given the company’s large exposure to the resource.
What is of greater interest is the disparity of Mr. Mulva’s share purchase price of $89 per share versus the $86.82 share price as of the writing of this article. Given Mr. Mulva’s extremely close association with the company, its balance sheets, cash positions and future prospects, we should pay special heed to this often overlooked clue.
