Warren Buffett Increases Occidental Stake to Nearly 29% with Nine Consecutive Days of Purchases

Warren Buffett’s investment acumen is once again making headlines as Berkshire Hathaway steadily increases its stake in Occidental Petroleum. Over the past nine trading sessions, the Omaha-based conglomerate has acquired more shares of the Houston-based oil and gas producer, driving its ownership to nearly 29%, according to recent regulatory filings.

Strategic Acquisitions

Between June 5 and the most recent Monday, Berkshire Hathaway purchased an additional 7.3 million shares of Occidental at prices slightly above or below $60 per share. This aggressive buying spree has boosted Berkshire’s holdings to over 255 million shares, representing a 28.8% stake. With this move, Occidental has become Berkshire’s sixth-largest stock holding, and the conglomerate now stands as Occidental’s largest institutional investor by a significant margin.

Financial Power Moves

Berkshire Hathaway’s investment in Occidental isn’t limited to common stock. The conglomerate also owns $10 billion of Occidental preferred stock and holds warrants to buy another 83.9 million common shares for $5 billion at $59.62 each. These warrants were acquired as part of a 2019 deal that helped finance Occidental’s purchase of Anadarko Petroleum.

As of the latest closing price of $60.2 per share, Buffett’s warrants are “in the money,” and a full redemption of the preferred equity could see Berkshire’s ownership in Occidental rise above 40%.

A Strategic Vision

Despite speculation about a potential takeover, Buffett has made it clear that he does not intend to take full control of Occidental. The legendary investor started buying Occidental shares after reading a transcript of the company’s earnings conference call, stating, “I read every word and thought, this is exactly what I would be doing.”

Buffett has also expressed confidence in Occidental CEO Vicki Hollub, praising her for “running the company the right way.”

Steady Performance and Future Prospects

Occidental offers a 1.5% dividend yield, and its stock has remained relatively stable this year after a 5% dip in 2023. Buffett highlighted that he took advantage of market volatility in early 2022 to acquire 14% of the energy firm, worth more than $7 billion, in just two weeks.

Reflecting on the ease of such a substantial acquisition, Buffett said, “I find it incredible. You couldn’t do that with Berkshire. Large companies in America became poker chips. Imagine trying to buy 14% of the farms, apartment houses, auto dealerships, or just about anything, with 40% already locked up elsewhere.”

The Buffett Strategy

Warren Buffett’s strategic moves in the stock market continue to showcase his investment prowess. By steadily increasing Berkshire Hathaway’s stake in Occidental Petroleum, he not only solidifies his influence in the energy sector but also demonstrates the value of careful analysis and decisive action.

As investors and market watchers follow these developments, one thing remains clear: Buffett’s approach to investing is as relevant and impactful as ever. Whether it’s through acquiring significant stakes in companies or leveraging market opportunities, the “Oracle of Omaha” continues to set a benchmark for smart, strategic investing.

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