ExxonMobil
Turns out, the view is mostly bullish. Let's have a look at a few of the key sentiment drivers.
1. Analyst opinion
Analysts lean positive on Exxon. Data from Capital IQ captures their collective feeling:
|
Buy |
8 |
|
Outperform |
1 |
|
Hold |
10 |
|
Underperform |
0 |
|
Sell |
1 |
Eight analysts have a "buy" rating and one has an "outperform" rating on the stock, but the most widely held opinion (10 analysts) is the neutral "hold," with a lone "sell." For purposes of this exercise, we'll classify analyst sentiment as "neutral-leaning-bullish."
2. Insider buying
Next, we'll look at insider buying and selling. Over the past year, ExxonMobil insiders have sold $46.8 million worth of their company stock. During the same time period, insiders bought $598,590 worth of the stock. (Data from Form4Oracle.)
While $46.2 million of net insider selling isn't meaningful relative to Exxon's $421 billion market cap, and while insiders sell stock for a whole host of reasons -- to pay for a house or tuition, to diversify assets, and so forth -- it'd be nice to see insider buying/selling a bit more balanced. Still, as a percentage of the company's market cap, the selling is small, so we'll classify this trend as neutral.
3. Guru buying
Third, we'll look at "guru" ownership of the stock, according to GuruFocus.
In the quarter ended Dec. 31, four gurus were buying Exxon shares, among them Don Yacktman, Tom Gayner, and Tweedy, Browne. In the same time period, five gurus reduced or sold out of their position entirely. Among the latter group were John Hussman, Chuck Akre, and David Dreman. In the previous quarter, six gurus were buying Exxon, while five were selling.
That's a pretty even split among guru buyers and sellers. As such, we'll classify "guru buying" sentiment as neutral.
4. Retail investor community sentiment
For retail investor community sentiment, I turn to Motley Fool CAPS, our proprietary stock rating system. CAPS generates ratings on a one- to five-star scale, with five stars as the highest ranking, indicating that the Fool community believes in a stock's future. That's mostly the case for ExxonMobil: The stock has a four-star rating.
5. Short-sellers
Next we'll look at whether short-sellers are circling the stock. There are 32 million Exxon shares sold short, according to Capital IQ. As a percentage of shares outstanding, that's a short interest of 0.6%. That's not at all high, and so for determining sentiment, we'll classify the low short interest as bullish.
6. Does Buffett own it?
This is the "cherry on top" test, and in this case, it's a yes: Though the stake is small relative to Berkshire Hathaway's other public company stakes, it does own shares of Exxon.
Adding it up
Even though insiders and gurus are neutral on the stock, Exxon's overall sentiment is mostly bullish. Analysts have a generally favorable view of the stock, and the CAPS community is positive on Exxon. Short-sellers aren't targeting the stock in a meaningful way -- another bullish sign -- and Exxon passes our cherry-on-top test, as Berkshire owns shares.
Of course, you can't base an investment philosophy on who likes or dislikes the stock you own, and even a consensus bullish opinion can sometimes be a scary thing. Quoting Buffett: "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful."
The purpose of this article isn't to make a definitive buy or sell call on Exxon. Rather, by looking at a stock's sentiment, the goal is to help you place your own opinion of it in a broader context.
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