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S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
5 Small-Cap Energy Stocks Surged in Price and Volume on Friday
Divisive? Not for moviegoers. ‘Civil War’ declares victory at box office.
Novo Nordisk Arms Wegovy to Be a Triple Threat
Stock market today: Global markets are mixed as Middle East tensions escalate
Vital Farms Rides the Pasture-Raised Egg Trend to the Bank
Did You Miss the Gold Rush? Try These 2 Silver Stocks
Citi’s Results Say This About The Stock Market
S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
5 Small-Cap Energy Stocks Surged in Price and Volume on Friday
Divisive? Not for moviegoers. ‘Civil War’ declares victory at box office.
Novo Nordisk Arms Wegovy to Be a Triple Threat
Stock market today: Global markets are mixed as Middle East tensions escalate
Vital Farms Rides the Pasture-Raised Egg Trend to the Bank
Did You Miss the Gold Rush? Try These 2 Silver Stocks
Citi’s Results Say This About The Stock Market
S&P 500   5,123.41
DOW   37,983.24
QQQ   438.27
5 Small-Cap Energy Stocks Surged in Price and Volume on Friday
Divisive? Not for moviegoers. ‘Civil War’ declares victory at box office.
Novo Nordisk Arms Wegovy to Be a Triple Threat
Stock market today: Global markets are mixed as Middle East tensions escalate
Vital Farms Rides the Pasture-Raised Egg Trend to the Bank
Did You Miss the Gold Rush? Try These 2 Silver Stocks
Citi’s Results Say This About The Stock Market

Warren Buffett Boosts Occidental Stake, Adds 3.46 Million Shares

Occidental Petroleum stock price chart

Key Points

  • Berkshire Hathaway's new purchases of Occidental Stock were valued at over $200 million and took place between May 16 and 18.
  • Previously, various Berkshire Hathaway entities acquired 2.2 million shares of Occidental stock between May 11 and 15.
  • Berkshire's total stake in Occidental now stands at nearly 25%.
  • Buffett has been gradually accumulating Occidental shares since 2022.
  • Buffett has expressed no interest in acquiring Occidental outright, saying he is happy with the company's management.
  • 5 stocks we like better than Occidental Petroleum

Warren Buffett’s Berkshire Hathaway Inc. NYSE: BRK.B is continuing to shop in the Occidental Petroleum Corp. (NYSE: OXY) aisle, adding 3.46 million shares to his position. The new purchases, valued at over $200 million, took place between May 16 and 18.

Previously, various Berkshire Hathaway entities purchased Occidental stock between May 11 and May 15,  for a total of 2.2 million shares valued at $125.7 million.

Buffett’s total stake in Occidental now stands at nearly 25%. 

The price at purchase is reported on an average basis. In the May 11 through May 15 filing, Berkshire Hathaway reported prices ranging from $56.7976 to $58.4611. The rose on each subsequent day.

Between May 16 and May 18, share prices ranged from $58.1144 to $58.6597. The price actually declined on May 18, allowing Berkshire Hathaway to get in at a slightly lower entry point. 

Gradually Accumulating Shares

That’s an excellent example of how a large institution gradually accumulates a position in a stock. Buffett began buying shares of Occidental in 2022, and has been gradually adding to his stake. 

In this case, Buffett’s buying is helping to send the price higher, or at least stabilize it. The Occidental Petroleum chart reveals solid support above a March 15 structure low of $55.51. It appears that Berkshire Hathaway is stepping in to purchase more shares without letting the price drop below that floor. 

So would Buffett buy more shares at a higher price? It appears that’s happening, but it’s also important to know: Berkshire also has warrants to purchase an additional 83.9 million shares of Occidental for  $59.62 apiece. The warrants were part of a 2019 deal in which Berkshire gave Occidental a $10 billion cash infusion to help finance its purchase of Anadarko. 

The acquisition provided Occidental with increased oil and gas reserves, particularly in the Permian Basin, a prolific shale oil region in West Texas and Southeastern New Mexico. Occidental's decision to acquire Anadarko was part of a competitive bidding process with Chevron Corporation NYSE: CVX, a stock that Buffett has been paring back, although he still has significant ownership.


When To Exercise Warrants

So when might Buffett exercise the Occidental warrants? Watch for the stock to rise above that $59.62 level. It’s currently trading less than 1% below that level. It’s not necessarily the case that Buffett will pounce as soon as Occidental rises to $59.63; in fact, the higher the price rises, the more valuable the warrants become, as it means Berkshire can acquire more shares for a lower price.

As of March 31, Berkshire also owned about $9.5 billion of Occidental preferred stock, which has an 8% annual dividend. Preferred shares carry no voting rights, but they compensate investors with priority for dividends and often by paying a higher yield. The Occidental Petroleum dividend yield for common shares is 1.2%. 

The outstanding warrants answer any questions about Buffett’s intention to buy more shares, but some analysts are still puzzled by his statements that he has no interest in buying the company outright. 

Approval To Own 50%

In August, Berkshire got the OK from the Federal Energy Regulatory Commission to purchase as much as 50% of Occidental's common shares. That approval was necessary because when Berkshire’s warrants are exercised, its stake would exceed regulators’ 25% ownership threshold.

At the Berkshire Hathaway annual meeting in early May, Buffett said he has no plans to acquire the company outright. He emphasized something he has said before: He’s happy with the company’s current management, especially CEO Vicki Hollub, with whom he works closely. 

Share Buybacks Add To Yield

Occidental increased its dividend in 2021, after slashing it in 2022. It initiated a share buyback program in 2022, for a total yield to shareholders of 7.72% in the past 12 months. 

Occidental shares were up 1.85% on May 19, following news about Buffett’s purchases. However, it’s still unknown if Berkshire was continuing its buying spree; if so, any Occidental purchases would be reported within a few days, due to the company’s ownership stake.

Should you invest $1,000 in Occidental Petroleum right now?

Before you consider Occidental Petroleum, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Occidental Petroleum wasn't on the list.

While Occidental Petroleum currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Occidental Petroleum (OXY)
3.8038 of 5 stars
$69.01-0.4%1.28%17.65Moderate Buy$72.06
Berkshire Hathaway (BRK.B)
0.2807 of 5 stars
$403.26-1.1%N/A9.11Hold$414.00
Chevron (CVX)
4.8933 of 5 stars
$158.96-1.8%4.10%13.99Moderate Buy$183.60
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


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