1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 83
Exxon Mobil Corporation (NYSE:XOM) was hedge funds’ favorite energy stock at the end of the first quarter of 2022, where 83 reported bullish bets on the company shares, in contrast to 71 hedge funds a quarter earlier. The combined value of Q1 hedge fund holdings stood at $8.55 billion.
Based in Texas, Exxon Mobil Corporation (NYSE:XOM) deals in the production, transportation and sale of crude oil, natural gas, petroleum products and other petrochemicals around the globe. With a market cap of $411.4 billion, Exxon Mobil Corporation (NYSE:XOM) is one of the world’s largest firms by revenue. It is also a notable dividend payer, with 39 consecutive years of payout increases and a yield of 3.60% as of June 2.
For the first quarter of 2022, Exxon Mobil Corporation (NYSE:XOM) reported an EPS of $2.07, falling short of analysts’ estimates by $0.16. Quarterly revenue increased 53% year-over-year to reach $90.50 billion, outperforming consensus estimates by $5.62 billion. As of June 2, the company shares have experienced a surge of 59.64% in the last 12 months, and 10.75% in the last month.
Barclays analyst Jeanine Wai on May 31 kept an ‘Overweight’ rating on Exxon Mobil Corporation (NYSE:XOM) shares, and raised the firm’s price target to $111 from $98. The analyst sees slightly more upside to the company shares in comparison to rival Chevron (NYSE:CVX).
Investment firm Goehring & Rozencwajg Associates talked about many stocks in its Q3 2021 investor letter, and Exxon Mobil Corporation (NYSE:XOM) was one of them. 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.”
You can also take a look at 11 Best Value Stocks To Buy According To Warren Buffett and 10 Best Stocks to Buy According to Peter Lewis’ LFL Advisers.
