Warren Buffett’s Berkshire Hathaway has been steadily increasing its stake in Occidental Petroleum over the past nine trading sessions. With purchases made each trading day from June 5th, Berkshire now holds almost 29% of the Houston-based oil and gas producer. This recent surge in purchases has brought their total holding to over 255 million shares, making Occidental the sixth-largest stock holding in Berkshire’s portfolio.
Berkshire’s interest in Occidental Petroleum is not only limited to common shares. The conglomerate also owns $10 billion of Occidental preferred stock and has warrants to buy an additional 83.9 million common shares at $59.62 each. The warrants were obtained as part of a 2019 deal to help finance Occidental’s acquisition of Anadarko Petroleum. It is worth noting that with the recent surge in purchases, Buffett’s warrants are now considered “in the money.”
Despite Berkshire’s significant stake in Occidental Petroleum, Warren Buffett has clarified that he has no intention of taking full control of the company. While speculation of a potential takeover arose after Berkshire received regulatory approval to purchase up to a 50% stake, Buffett has emphasized his confidence in Occidental’s current management. Buffett has praised Occidental CEO Vicki Hollub for “running the company in the right way” and has expressed satisfaction with the company’s dividend yield of 1.5%.
Occidental Petroleum’s stock performance has been relatively stable this year, with a slight dip of 5% in 2023. Warren Buffett has stated that he took advantage of market volatility in early 2022 to acquire a significant portion of the energy firm in just two weeks. Despite fluctuations in the market, Buffett’s long-term investment strategy remains focused on companies with strong fundamentals and growth potential.
Warren Buffett’s increased stake in Occidental Petroleum reflects his confidence in the company’s future prospects and management. As one of the most renowned investors in the world, Buffett’s strategic moves in the stock market are closely watched by investors and analysts alike. His decision to expand Berkshire Hathaway’s holdings in Occidental demonstrates a continued commitment to long-term value creation and strategic investment opportunities in the energy sector.