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

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of Exxon Mobil Corporation (NYSE:XOM).

Is Exxon Mobil Corporation (NYSE:XOM) a superb investment today? Money managers were becoming more confident. The number of long hedge fund bets increased by 2 lately. Exxon Mobil Corporation (NYSE:XOM) was in 65 hedge funds’ portfolios at the end of March. 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 Q1 rankings). There were 63 hedge funds in our database with XOM holdings at the end of December.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

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. Now let’s check out the new hedge fund action regarding Exxon Mobil Corporation (NYSE:XOM).

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

Heading into the second quarter of 2021, a total of 65 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from the previous quarter. The graph below displays the number of hedge funds with bullish position in XOM over the last 23 quarters. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

Among these funds, Fisher Asset Management held the most valuable stake in Exxon Mobil Corporation (NYSE:XOM), which was worth $450 million at the end of the fourth quarter. On the second spot was Adage Capital Management which amassed $363.3 million worth of shares. 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 0 allocated the biggest weight to Exxon Mobil Corporation (NYSE:XOM), around 18.81% of its 13F portfolio. 0 is also relatively very bullish on the stock, designating 6.96 percent of its 13F equity portfolio to XOM.

As industrywide interest jumped, some big names have jumped into Exxon Mobil Corporation (NYSE:XOM) headfirst. Renaissance Technologies, created the biggest position in Exxon Mobil Corporation (NYSE:XOM). Renaissance Technologies had $162.1 million invested in the company at the end of the quarter. Jacob Mitchell’s Antipodes Partners also initiated a $123 million position during the quarter. The other funds with new positions in the stock are Jeff Ubben’s Inclusive Capital, Frank Brosens’s Taconic Capital, and Anand Parekh’s Alyeska Investment Group.

Let’s check out 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 Netflix, Inc. (NASDAQ:NFLX), Adobe Inc. (NASDAQ:ADBE), The Coca-Cola Company (NYSE:KO), Cisco Systems, Inc. (NASDAQ:CSCO), Toyota Motor Corporation (NYSE:TM), AT&T Inc. (NYSE:T), and Abbott Laboratories (NYSE:ABT). This group of stocks’ market caps are similar to XOM’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 69 hedge funds with bullish positions and the average amount invested in these stocks was $9290 million. That figure was $2770 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 18 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 61.2. 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 25.8% in 2021 through August 6th and surpassed the market again by 6.7 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 5.1% since the end of March (through 8/6) 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.