The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on December 31st. We at Insider Monkey have made an extensive database of more than 887 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Exxon Mobil Corporation (NYSE:XOM) based on those filings.
Exxon Mobil Corporation (NYSE:XOM) shareholders have witnessed an increase in support from the world’s most elite money managers recently. Exxon Mobil Corporation (NYSE:XOM) was in 63 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 68. Our calculations also showed that XOM isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ken Fisher of Fisher Asset Management
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Do Hedge Funds Think XOM Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 63 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21% from the previous quarter. The graph below displays the number of hedge funds with bullish position in XOM over the last 22 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).
More specifically, Adage Capital Management was the largest shareholder of Exxon Mobil Corporation (NYSE:XOM), with a stake worth $529 million reported as of the end of December. Trailing Adage Capital Management was Fisher Asset Management, which amassed a stake valued at $320.6 million. Citadel Investment Group, D E Shaw, and Millennium Management 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 16.31% of its 13F portfolio. SIR Capital Management is also relatively very bullish on the stock, designating 3.83 percent of its 13F equity portfolio to XOM.
There weren’t any hedge funds initiating brand new positions in the stock during the fourth quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Exxon Mobil Corporation (NYSE:XOM) but similarly valued. We will take a look at Accenture Plc (NYSE:ACN), QUALCOMM, Incorporated (NASDAQ:QCOM), T-Mobile US, Inc. (NYSE:TMUS), Costco Wholesale Corporation (NASDAQ:COST), BHP Group (NYSE:BHP), Novo Nordisk A/S (NYSE:NVO), and Chevron Corporation (NYSE:CVX). This group of stocks’ market caps are similar to XOM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACN | 50 | 2133706 | 4 |
| QCOM | 85 | 2727547 | -2 |
| TMUS | 103 | 9117019 | 9 |
| COST | 61 | 3613961 | -12 |
| BHP | 20 | 1099946 | 2 |
| NVO | 23 | 3161939 | 1 |
| CVX | 50 | 5390278 | 7 |
| Average | 56 | 3892057 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 56 hedge funds with bullish positions and the average amount invested in these stocks was $3892 million. That figure was $2209 million in XOM’s case. T-Mobile US, Inc. (NYSE:TMUS) is the most popular stock in this table. On the other hand BHP Group (NYSE:BHP) is the least popular one with only 20 bullish hedge fund positions. Exxon Mobil Corporation (NYSE:XOM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for XOM is 63.7. 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 percentage points. These stocks gained 13.6% in 2021 through April 30th and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on XOM as the stock returned 41.2% since the end of Q4 (through 4/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
