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Energy Institutional Holdings: XOM, CVX, RDS.A, BP

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Institutional holdings in energy stocks changed quite a lot in the third quarter. In the previous quarter, energy stocks slumped due to a decline in oil prices and volatile equity markets. In the quarter, some institutions (including Vanguard) bought leading energy stocks such as ExxonMobil (XOM) and Chevron (CVX). However, others (including State Street and Fidelity) bought some energy stocks and sold others.

Institutional holdings in Royal Dutch Shell (RDS.A), ExxonMobil, Chevron, and BP (BP) vary between 9% and 68%. The highest institutional ownership is in Chevron at 68%, followed by ExxonMobil at 56%. Further, the US institutional holdings in Shell and BP stand at 9% and 11%, respectively.

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Institutional holdings in energy companies XOM and CVX

Leading institutional owners the Vanguard Group, BlackRock Institutional Trust Company, and State Street Global Advisors weren’t choosy between ExxonMobil and Chevron. Either they bought XOM and CVX together or sold both. None bought one and sold the other.

The leading institutional holder in ExxonMobil and Chevron was Vanguard. The institution has bought over 2 million ExxonMobil shares and over 1 million Chevron shares in the third quarter. Similarly, Blackrock obtained stakes in both XOM and CVX in the quarter.

However, State Street reduced its holdings in XOM and CVX. The institution sold about 3.3 million shares of ExxonMobil, reducing its stake by 1.6%. Also, State Street sold about 1.7 million shares of Chevron, lowering its holdings by 1.5%. Surprisingly, State Street bought more BP shares in the quarter, which we’ll discuss below. Further, Geode Capital Management bought stakes in ExxonMobil and Chevron.

So, seven out of nine top institutional holders raised their stakes in ExxonMobil stock in the third quarter. In comparison, six out of nine holders of Chevron stock increased their holdings in it in the quarter.

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Institutional holdings in Shell

The top five institutional holders in Shell stock are Franklin Advisers, Fisher Investments, Fidelity Management, Boston Partners, and Thornburg Investment Management. Four of the top five holders raised their stakes in Shell in the third quarter. Franklin, Fisher, Fidelity, and Thornburg bought shares of Shell in the period.

Franklin seems to have taken a significant number of shares in the company. It’s the highest buyer of Shell stock if we consider filing dates over the past six months.

Overall, five of the top nine institutional holdings in Shell rose in the third quarter.

Institutional ownership in BP

State Street, which sold ExxonMobil and Chevron stocks in the third quarter, bought about 0.4 million shares of BP. It raised its holdings by 1.5% in BP and became the stock’s top institutional holder.

Fidelity, Renaissance Technologies, Dimensional Fund Advisors, and T. Rowe Price Associates also held significant positions in BP stock at the end of the third quarter. While Fidelity and T. Rowe lowered their holdings in BP in the quarter, Renaissance and Dimensional raised their holdings in the stock.

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Institutional holdings in energy companies in the fourth quarter

In the current quarter, institutional holdings in energy stocks will be affected by their third-quarter results, oil prices, and equity markets. Crude oil prices have increased 5.3%, and the S&P 500 Index has risen 5.1% quarter-to-date.

Energy stocks have shown mixed performances. In the quarter so far, while Chevron, Shell, and BP stocks have risen 0.1%, 1.0%, and 2.8%, respectively, ExxonMobil has slumped 3.0%. To learn more about the above stocks, read Energy Stocks in Q4: ExxonMobil, Chevron, Shell, and BP.

Energy companies surpassed Wall Street analysts’ estimates in the third quarter. All four energy stocks under discussion posted better-than-expected adjusted EPS in the quarter. However, their earnings slipped due to weaker upstream profits. Lower crude oil and natural gas prices affected these companies’ hydrocarbon realizations and earnings in the period.

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Earnings outlook

Wall Street analysts expect these companies’ earnings to fall in 2019, followed by a recovery in 2020. In the current year, ExxonMobil’s EPS are expected to plunge the most by about 45%. BP’s earnings are expected to fall 24%. Chevron’s and Shell’s earnings could plunge 18% and 13%, respectively, in 2019.

However, in 2020, Wall Street expects ExxonMobil to post a robust recovery of 42%. This could be due to strong growth in its Permian asset base, which is pumping up its overall production. Analysts expect Shell’s and BP’s earnings to rise 21% and 19%, respectively. But they expect Chevron’s earnings to increase 9% in the next year, the lowest among its peers.

Overall, in the next two years, Shell seems well positioned. Analysts expect Shell’s earnings to rise 5% from 2018 to 2020. However, analysts expect other integrated energy companies’ earnings to slump in the same period. They expect ExxonMobil’s earnings to fall the most by 21% in the next two years. Also, analysts expect Chevron’s and BP’s profits to fall 10% and 9%, respectively, from 2018 to 2020.

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