Were Hedge Funds Right Betting On These Energy Stocks?

#3 Exxon Mobil Corporation (NYSE:XOM)

-Hedge Funds with Long Positions (as of September 30): 61

-Aggregate Value of Hedge Funds’ Holdings (as of September 30): $3.18 billion

After declining for five quarters in a row in tandem with oil prices, shares of Exxon Mobil Corporation (NYSE:XOM) finally managed to change their course by moving up almost 5% during the last three months of 2015. Amid a 10% decline during the third quarter, the ownership of the company among funds covered by us had declined by six. Billionaire David E. Shaw‘s firm, D.E. Shaw, reduced its stake in the company by 34% to 2.55 million shares.

Though the price of oil has continued its decline in 2016, things are looking more optimistic for Exxon Mobil Corporation (NYSE:XOM)  now than they were at the start of 2015 thanks to the cost-cutting measures the company has taken in the last few quarters and its decision to not take any major projects until oil prices rebound.  Like Schlumberger Limited, Exxon Mobil Corporation has also managed to continue paying dividends to its investors in the current unfavorable scenario. Owing to the decline in its stock price, the current dividend yield of the stock is close to touching 4%. Interestingly, even though its stock has slumped heavily Exxon Mobil Corporation is currently trading at a price-to-earnings multiple of 15.89, which is significantly higher than its historical average.

Earlier this week, Societe Generale reaffirmed its ‘Buy’ rating and $90 price target on Exxon. However, last month, a number of analysts lowered their price targets, including JPMorgan Chase & Co. and Barclays, which reduced their targets to $70 and $80, respectively.