Corporate insiders have the most up-to-date information on their companies’ operating activities and often also have a wealth of experience that can help them evaluate their firms’ prospects. If these individuals are buying stock, it’s usually worth taking a closer look.
In this report, we are going to highlight some interesting insider buying at Exxon Mobil Corp (XOM:US). Exxon Mobil is one of the world’s largest publicly-traded international oil and gas companies. The company, which was formed in 1999 by the merger of Exxon and Mobil, has both upstream and downstream operations and is also active in the renewable energy space. It is listed on the New York Stock Exchange and currently has a market capitalization of $278 billion.
Exxon Mobil: Insider Buying
Our insider transaction data shows that on November 3, board member Michael Angelakis bought 5,000 XOM shares at a price of $64.00 per share. This trade cost the insider $320,000 and increased his holding to 38,000 shares.
Mr. Angelakis is the Chairman and CEO of Atairos, an independent strategic investment company that is focused on supporting growth-oriented businesses across a range of industries. Previously, he was CFO at Comcast and Managing Director at Providence Equity Partners. Given his experience, he is likely to have a good understanding of Exxon Mobil’s intrinsic value.
It’s worth noting that this trade represents Mr. Angelakis’ second purchase of Exxon Mobil stock in 2021. Back in early March, the insider picked up 25,000 shares at a price of $57.16 per share, spending around $1.4 million on stock. That trade was timed quite well. Over the next fortnight, the stock spiked up to $62.50.
Benefiting From Higher Oil Prices
Exxon Mobil is benefitting from the rise in oil prices.
For the third quarter of 2021, total revenue was up 60% year on year to $73.8 billion. Meanwhile, earnings for the quarter amounted to $6.8 billion versus a loss of $680 million a year earlier. Cash flow from operating activities was $12.1 billion, which funded capital investments, debt reduction, and the dividend.
“All three of our core businesses generated positive earnings during the quarter, with strong operations and cost control, as well as increased realizations and improved demand for fuels,” said Chairman and CEO Darren Woods in the company’s earnings press release.
Looking ahead, Exxon Mobil plans to use its strong cash flows to fund lower-carbon opportunities that leverage its competitive strengths in technology, engineering and project development. It also plans to further increase shareholder distributions by up to $10 billion through a share repurchase program over 12-24 months, beginning in 2022.
In light of these strong results, we see the insider buying here as a bullish indicator.