Intensifying Insider Selling Activity at Eli Lilly and Co (LLY), Exxon Mobil Corporation (XOM) and Edwards Lifesciences Corp (EW)

Exxon Mobil Corporation (NYSE:XOM) saw three different executives sell shares last week, which is not surprising considering the company’s stock performance in 2016 and the gloomy prospects for the oil industry. To start with, James M. Spellings Jr., Vice President and General Tax Counsel, unloaded 11,924 shares on Friday at $78.90 apiece and now owns 186,750 shares. Vice President Alan J. Kelly discarded 9,159 shares on the same day at prices that ranged from $79.23 to $79.25 per share, cutting his stake to 255,020 shares. Vice President Dennis G. Wascom offloaded 2,600 shares on Wednesday and 2,600 shares on Thursday at a weighted average price of $78.90 and currently holds a 164,526-share stake.

The shares of the largest publicly-held oil company are down by 11% over the past 12 months, after having gained 4% thus far in 2016. Exxon recently released its financial results for the fourth quarter of 2015, which compelled Credit Suisse’s analysts to raise their price target on the stock to $73 from $68 (the ‘Underperform’ rating remained unchanged however). Exxon Mobil reported earnings of $16.15 billion for the full 2015 year, less than half of the $32.52 billion reported for 2014. The company also paid out $12.09 billion in dividends last year, which yields a payout ratio of almost 75%. It is important to note that Exxon has increased its annual dividend payment for 33 straight years, so it is highly likely that the company’s payout ratio will increase above 100% this year should the depressed conditions in the oil market stick around. In fact, analysts anticipate that Exxon will generate $10.5 billion in earnings for 2016, so the company’s current dividend does not seem to be sustainable for a long period of time. A total of 61 hedge funds from our system were invested in Exxon Mobil at the end of the September quarter, amassing a mere 1% of the company’s total shares. Ken Fisher’s Fisher Asset Management cut its stake in Exxon Mobil Corporation (NYSE:XOM) by nearly 88,000 shares during the final quarter of 2015, to 5.39 million shares.

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