Exxon Mobil Corporation (NYSE:XOM) is usually well-loved by hedge funds each quarter, but in Q2 2013, this data is exemplary. We won’t spoil it for you, but you may just want to jump into the stock right now if there are any hedgies you piggyback who are long. The oil giant is up only 1.4% year-to-date, so any positive news is good news.
In the eyes of most stock holders, hedge funds are perceived as underperforming, old financial vehicles of the past. While there are greater than 8000 funds in operation at present, we hone in on the leaders of this group, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by watching their highest performing picks, we have unearthed a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as integral, bullish insider trading activity is a second way to parse down the world of equities. Just as you’d expect, there are a number of stimuli for an executive to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the valuable potential of this tactic if piggybackers understand where to look (learn more here).
With all of this in mind, let’s take a look at the recent action surrounding Exxon Mobil Corporation (NYSE:XOM).
How are hedge funds trading Exxon Mobil Corporation (NYSE:XOM)?
At the end of the second quarter, a total of 60 of the hedge funds we track held long positions in this stock, a change of 18% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes significantly.
When looking at the hedgies we track, Michael Larson’s Bill & Melinda Gates Foundation Trust had the biggest position in Exxon Mobil Corporation (NYSE:XOM), worth close to $690.6 million, comprising 3.9% of its total 13F portfolio. Coming in second is Donald Yacktman of Yacktman Asset Management, with a $505.6 million position; 2.4% of its 13F portfolio is allocated to the stock. Other hedgies that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, Ken Fisher’s Fisher Asset Management and Natixis Global Asset Management’s Harris Associates.
As one would reasonably expect, some big names have jumped into Exxon Mobil Corporation (NYSE:XOM) headfirst. Bill & Melinda Gates Foundation Trust, managed by Michael Larson, assembled the biggest position in Exxon Mobil Corporation (NYSE:XOM). Bill & Melinda Gates Foundation Trust had 690.6 million invested in the company at the end of the quarter. Donald Yacktman’s Yacktman Asset Management also initiated a $505.6 million position during the quarter. The following funds were also among the new XOM investors: Phill Gross and Robert Atchinson’s Adage Capital Management, Ken Fisher’s Fisher Asset Management, and Cliff Asness’s AQR Capital Management.
How have insiders been trading Exxon Mobil Corporation (NYSE:XOM)?
Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the latest 180-day time frame, Exxon Mobil Corporation (NYSE:XOM) has experienced 1 unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Exxon Mobil Corporation (NYSE:XOM). These stocks are TOTAL S.A. (ADR) (NYSE:TOT), BP plc (ADR) (NYSE:BP), Royal Dutch Shell plc (ADR) (NYSE:RDS.B), Chevron Corporation (NYSE:CVX), and PetroChina Company Limited (ADR) (NYSE:PTR). All of these stocks are in the major integrated oil & gas industry and their market caps resemble XOM’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| TOTAL S.A. (ADR) (NYSE:TOT) | 11 | 0 | 0 |
| BP plc (ADR) (NYSE:BP) | 38 | 0 | 0 |
| Chevron Corporation (NYSE:CVX) | 47 | 1 | 6 |
| PetroChina Company Limited (ADR) (NYSE:PTR) | 13 | 0 | 0 |
With the returns demonstrated by the aforementioned studies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Exxon Mobil Corporation (NYSE:XOM) shareholders fit into this picture quite nicely.
