Does Exxon Mobil Have a Bright Future?

With shares of Exxon Mobil (NYSE:XOM) trading around $95, is XOM an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Exxon Mobil is a manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and a range of specialty products. The company has a number of divisions and affiliates with names that include ExxonMobil, Exxon, Esso, or Mobil that operate or market products in the United States and other countries of the world. Exxon Mobil's principal business is energy, involving exploration for and production of crude oil and natural gas; manufacture of petroleum products; and transportation and sale of crude oil, natural gas, and petroleum products.

Exxon Mobil shares are up in premarket trading as Warren Buffett's conglomerate, Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB), bought 40.1 million shares in the oil major, making the company Exxon's sixth-largest shareholder. The stake is worth $3.45 billion, according to a filing with the U.S. Securities and Exchange Commission seen by Reuters. Buffett bought the stake in Exxon in the second quarter but received SEC permission to not reveal the buy until now, a move he sometimes employs to prevent investors from copying him, Reuters said.

T = Technicals on the Stock Chart Are Strong

Exxon Mobil stock has remained in a range over the last several years. The stock is currently trading near highs for the year and looks poised to continue. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Exxon Mobil is trading above its rising key averages, which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Exxon Mobil options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Exxon Mobil Options	15.20%	0%	0%

What does this mean? This means that investors or traders are buying a very small amount of call and put options contracts as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
December Options	Flat	Average
January Options	Flat	Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very small amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Exxon Mobil’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Exxon Mobil look like and more importantly, how did the markets like these numbers?

	10 Best Growth Stocks For 2014 2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	-14.35%	-54.55%	6.00%	11.33%
Revenue Growth (Y-O-Y)	-2.41%	-16.41%	-12.29%	-5.29%
Earnings Reaction	0.91%	-1.08%	-1.52%	0.07%

Exxon Mobil has seen mixed earnings and decreasing revenue figures over the last four quarters. From these numbers, the markets have been generally pleased with Exxon Mobil’s recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has Exxon Mobil stock done relative to its peers, BP (NYSE:BP), Chevron (NYSE:CVX), Royal Dutch Shell (NYSE:RDSA), and sector?

	Exxon Mobil	BP	Chevron	Royal Dutch Shell	Sector
Year-to-Date Return	8.97%	13.16%	10.73%	-2.45%	8.60%

Exxon Mobil has been an average relative performer, year-to-date.

Conclusion

Exxon Mobil is a provider of essential commodity products and services that people and companies use around the world. The companys shares are up in premarket trading as Warren Buffett's conglomerate, Berkshire Hathaway, bought 40.1 million shares in the oil major, making the company Exxon's sixth largest shareholder. The stock has been trading sideways for a couple of years, however, it’s currently trading near highs for the year. Over the last four quarters, earnings have been mixed while revenues have been decreasing yet, investors are still generally pleased with recent earnings announcements . Relative to its peers and sector, Exxon Mobil has been an average year-to-date performer. Look for Exxon Mobil To OUTPERFORM.