Were Hedge Funds Right About Exxon Mobil Corporation (XOM)?

We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article, we look at what those funds think of Exxon Mobil Corporation (NYSE:XOM) based on that data.

Is Exxon Mobil Corporation (NYSE:XOM) the right pick for your portfolio? Prominent investors were getting more bullish. The number of long hedge fund bets moved up by 3 in recent months. Exxon Mobil Corporation (NYSE:XOM) was in 68 hedge funds’ portfolios at the end of June. 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.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

William Harnisch of Peconic Partners LLC

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, the demand for helium is soaring and there is a helium supply shortage, so we are checking out stock pitches like this emerging helium 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. Now let’s take a glance at the recent hedge fund action encompassing Exxon Mobil Corporation (NYSE:XOM).

Do Hedge Funds Think XOM Is A Good Stock To Buy Now?

At second quarter’s end, 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. Below, you can check out the change in hedge fund sentiment towards XOM over the last 24 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, 0 held the most valuable stake in Exxon Mobil Corporation (NYSE:XOM), which was worth $899.1 million at the end of the second quarter. On the second spot was Fisher Asset Management which amassed $533.7 million worth of shares. Adage Capital Management, Pzena Investment Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. 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.

Now, key hedge funds were breaking ground themselves. GQG Partners, managed by Rajiv Jain, initiated the most valuable 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 following funds were also among the new XOM investors: Dmitry Balyasny’s Balyasny Asset Management, William Harnisch’s Peconic Partners LLC, and Charles Clough’s Clough Capital Partners.

Let’s check out 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.

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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 26.3% in 2021 through October 29th and surpassed the market again by 2.3 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 3.8% since the end of June (through 10/29) 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.

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Disclosure: None. This article was originally published at Insider Monkey.