As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Exxon Mobil Corporation (NYSE:XOM).
Is Exxon Mobil Corporation (NYSE:XOM) a healthy stock for your portfolio? The best stock pickers were becoming more confident. The number of long hedge fund positions increased by 3 lately. Exxon Mobil Corporation (NYSE:XOM) was in 68 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 68. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that XOM isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 65 hedge funds in our database with XOM holdings at the end of March.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Richard S. Pzena of Pzena Investment Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to view the key hedge fund action surrounding Exxon Mobil Corporation (NYSE:XOM).
Do Hedge Funds Think XOM Is A Good Stock To Buy Now?
At the end of June, a total of 68 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in XOM over the last 24 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Rajiv Jain’s 0 has the most valuable position in Exxon Mobil Corporation (NYSE:XOM), worth close to $899.1 million, corresponding to 2.6% of its total 13F portfolio. Coming in second is 0, led by Ken Fisher, holding a $533.7 million position; 0.3% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors with similar optimism comprise Phill Gross and Robert Atchinson’s 0, Richard S. Pzena’s 0 and Ken Griffin’s 0. 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 16.16% of its 13F portfolio. Inclusive Capital is also relatively very bullish on the stock, designating 9.8 percent of its 13F equity portfolio to XOM.
As industrywide interest jumped, key money managers have been driving this bullishness. GQG Partners, managed by Rajiv Jain, established the largest position in Exxon Mobil Corporation (NYSE:XOM). GQG Partners had $899.1 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also made a $87.1 million investment in the stock during the quarter. The other funds with brand new XOM positions are Dmitry Balyasny’s Balyasny Asset Management, William Harnisch’s Peconic Partners LLC, and Charles Clough’s Clough Capital Partners.
Let’s now review hedge fund activity in other stocks similar to Exxon Mobil Corporation (NYSE:XOM). We will take a look at Comcast Corporation (NASDAQ:CMCSA), Toyota Motor Corporation (NYSE:TM), NIKE, Inc. (NYSE:NKE), Netflix, Inc. (NASDAQ:NFLX), The Coca-Cola Company (NYSE:KO), Verizon Communications Inc. (NYSE:VZ), and Intel Corporation (NASDAQ:INTC). This group of stocks’ market caps match XOM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CMCSA | 84 | 9300743 | -4 |
| TM | 12 | 903060 | -6 |
| NKE | 67 | 6425093 | -11 |
| NFLX | 113 | 13216589 | 3 |
| KO | 62 | 24965786 | 1 |
| VZ | 63 | 10958091 | -6 |
| INTC | 78 | 6764047 | -5 |
| Average | 68.4 | 10361916 | -4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 68.4 hedge funds with bullish positions and the average amount invested in these stocks was $10362 million. That figure was $3698 million in XOM’s case. Netflix, Inc. (NASDAQ:NFLX) is the most popular stock in this table. On the other hand Toyota Motor Corporation (NYSE:TM) is the least popular one with only 12 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. Our overall hedge fund sentiment score for XOM is 65.7. 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 negative signal and 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 25.7% in 2021 through September 27th and surpassed the market again by 6.2 percentage points. Unfortunately XOM wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); XOM investors were disappointed as the stock returned -4.6% since the end of June (through 9/27) 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 most of these stocks already outperformed the market in 2021.
Follow Exxon Mobil Corp (NYSE:XOM)
Follow Exxon Mobil Corp (NYSE:XOM)
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Disclosure: None. This article was originally published at Insider Monkey.
