The price action in Occidental Petroleum has been range-bound for the last two years and may not break out of the range soon. However, the stock retreated to the low end of the range in December and sparked another round of purchases by Berkshire Hathaway. This is not surprising; the $58.50 level has marked the “Buffett Buy Zone” for the last two years and triggered multiple purchases by the same.
The question is, if Buffett is an investing genius (he is) and he keeps buying Oxy stock, there must be a reason, and if there’s a reason for him to buy it, it makes sense there’s a reason for the average investor to own some, too.
That reason is cash flow. Like all the major oil companies, Occidental is experiencing some of the healthiest cash flow in its history. The combination of tightened OPEC supply, stable and growing energy demand, and record non-OPEC production has the industry set up to do the same in 2024. What this means for Occidental is an opportunity to pay down debt, improve its capital structure, strengthen its balance sheet, buy back shares and pay dividends—a total package for investors.
Stocks Mentioned in This Episode
Add This Stock to My Watchlist Chris Markoch, Guest
MarketBeat Contributor, MarketBeat
Chris Markoch is a freelance financial copywriter with over five years of experience covering various aspects of the financial markets. You may find his writing a little different than other stock articles you’ve read. And that’s OK with him. Chris doesn’t have a traditional finance background. What he does bring to the table is a strong business and marketing background having worked for agencies that serviced Fortune 500 companies. With that in mind, he isn’t overly impressed with what companies say, and more focused on what they do. And because buyer behavior dictates so much of what happens with a stock, Chris always keeps the end consumer close in mind. Chris has been writing for MarketBeat since 2018.
Thomas Hughes, Guest
MarketBeat Contributor, MarketBeat
Thomas got his start with the markets while working as a Chef. In 2005 a chance invitation to attend the seminar “How To Buy And Sell Your Own Stocks” altered his worldview. Soon trading and stocks consumed his every waking moment to the point of excluding all else. Thomas now enjoys a much different lifestyle engaged in his true passion, uncovering great investments.
Laycee Kluin, Host
Digital Marketing Strategist, MarketBeat
As MarketBeat's Digital Marketing Strategist, Laycee helps with the marketing side of tasks including developing email campaigns, running the promotion of the MarketBeat products and exploring social media opportunities. She felt called to the Marketing industry because she enjoys collaborating with people and making connections. The University of Sioux Falls alum majored in Media Studies with minors in Communications and Spanish. Laycee brings a background in Financial Services Marketing.
