Eye on Insiders: ExxonMobil

Watching insiders is like participating in a weeks-long stakeout. You expect something to happen, but you don't know what. So you settle in, sip your coffee, and wait for clues to solving the big case.

Here, the "case" is direction: Which way is your stock headed? The "clues" come in the form of insider buying and selling action. Have a look at ExxonMobil (NYSE: XOM  ) over the past year.

Insider Rating

Modestly bullish
Low volume sales at much higher prices than the stock trades for today indicate that insiders see room for gains from today's levels.

Business Description

Dubbed the world's greatest company by Goldman Sachs analyst Arjun Murti, and the greatest in the history of the world by my Foolish friend Joe Magyer, Exxon is also one of the globe's most profitable.

Recent Price

$68.59

CAPS Stars (Out of 5)

****

Percentage of Shares Owned by Insiders

0.19%

Net Buying (Selling)*

($1.18 mil.)

Last Buyer (% Increase)

No purchases over the prior 12 months.

Last Seller (% Decrease)

Alan Kelly, vice president
1,000 shares at $71.31 apiece on June 1
(Sale represented less than 1% of remaining direct holdings)

Competitors

BP (NYSE: BP  )
Chevron (NYSE: CVX  )
Royal Dutch Shell (NYSE: RDS-A  )

CAPS Members Bullish on XOM Also Bullish on

Johnson & Johnson (NYSE: JNJ  )
General Electric (NYSE: GE  )

CAPS Members Bearish on XOM Also Bearish on

Chevron

Recent Foolish Coverage of XOM

When Will a Sensible Energy Plan Arrive?
Angola Becomes Africa's New Oil Kingpin
An Oil Company You Should Watch

Sources: Form 4 Oracle, Capital IQ, and Motley Fool CAPS. (Data current as of Aug. 20.)
*Open market sales and purchases only.

What we're tracking here, and why
Insider buying data can be confusing. Here, I'm concentrating only on buying and selling conducted in the open market. With most of these transactions, insiders control the timing. Other times they're buying or selling under the purview of a 10b5-1 plan. Either way, personal holdings are being bought and sold.

Those personal holdings matter the most -- they're the shares executives hold for investment, rather than compensation. Employee stock options are different; they're compensatory in the purest sense. I've stripped out options-related buying and selling from the calculations you see above.

The Foolish view: modestly bullish
Sometimes, macroeconomic tailwinds trip up even the best investors. Take Warren Buffett. The Oracle bought huge chunks of ConocoPhillips (NYSE: COP  ) stock near the top of last year's oil rally, and paid for it dearly. But now, with oil priced near 2009 highs, several of my Foolish colleagues are asking whether it's time to be buy producers such as ExxonMobil.

So are many of you. "Well-run company supplying energy which we will need for some time. Changes in the area are not quick so shifts will be easy to identify. At present, they still hold an advantage over most competition," wrote CAPS investor billxviii last week.

Foolish colleague David Lee Smith further points to measurable progress in Exxon's natural gas joint venture with Qatar Petroleum, and its ongoing project with TransCanada to build a pipeline stretching from Alaska to Chicago.

Whether insiders see as much opportunity isn't clear, especially since they're net sellers. But I like the volume and price patterns here. Why? Dumping has stopped with the recent price drop, leaving only the dependent children of company President Rex Tillerson as recent sellers.

But that's also just my take. Do you agree? Disagree? Log into CAPS today and tell us how you would rate ExxonMobil.

And if you want me to take a Foolish peek at the insider action of your favorite stock, email me here or use the comments box below. I'll write this column as often as you, our readers, demand. (And for the record, today's column was by reader request.)

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Fool contributor Tim Beyers owned shares of ExxonMobil at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy has its eye on you.


Read/Post Comments (3) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 21, 2009, at 1:20 PM, jmmixte wrote:

    Since EM stopped giving options to executives as part of its compensation program some years ago, it is unlikely you will have many insiders at all purchasing shares as used to occur when options were exercised. What the company does do is grant shares, which can be sold after a retention period.

    Thus it is very reasonable to see executives selling shares to diversify their investments. A sale of 1000 shares, generating $71,000 or so, sounds like someone getting ready to pay a college tuition, not indicating a negative direction in the prospects of the company!!

  • Report this Comment On August 21, 2009, at 4:46 PM, plange01 wrote:

    exxon is far over priced.with the summer ending oil speculators go with it and prices will test this years lows....

  • Report this Comment On August 21, 2009, at 10:06 PM, automaticaev wrote:

    i hope your right plange01 because i would like to buy some more oil but not at these prices.

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