Warren Buffett buys Occidental shares for 9 straight days, pushes his stake to nearly 29%

Investing

In this article

Warren Buffett walks the floor and meets with Berkshire Hathaway shareholders ahead of their annual meeting in Omaha, Nebraska, on May 3, 2024.
David A. Grogan

Warren Buffett‘s Berkshire Hathaway has scooped up more shares of Occidental Petroleum over each of the past nine trading sessions, driving his gigantic stake in the Houston-based oil and gas producer to almost 29%, according to regulatory filings.

The Omaha, Nebraska-based conglomerate purchased Occidental shares every trading day from June 5 to Monday, totaling an additional 7.3 million shares with purchase prices slightly under or above $60, filings showed.

The purchases brought Berkshire’s holding to over 255 million shares, representing a 28.8% stake. Occidental is Berkshire’s sixth-biggest stock holding, and the conglomerate has become Occidental’s biggest institutional investor by far.

Berkshire also owns $10 billion of Occidental preferred stock and has warrants to buy another 83.9 million common shares for $5 billion, or $59.62 each. The warrants were obtained as part of the company’s 2019 deal that helped finance Occidental’s purchase of Anadarko Petroleum.

The stock closed at $60.2 Monday, making Buffett’s warrants “in the money.” A full redemption of the preferred equity could lift Berkshire’s ownership of Occidental above 40%.

Buffett has clarified that he wouldn’t take full control of the oil company, once known for being founded by legendary oilman Armand Hammer. There had been speculation of a takeover after Berkshire received regulatory approval to purchase as much as a 50% stake. 

‘Read every word’

The “Oracle of Omaha” previously said he started buying Occidental after reading a transcript of the oil company’s earnings conference call.

“I read every word, and said this is exactly what I would be doing,” Buffett told CNBC.

Occidental CEO Vicki Hollub is “running the company the right way,” he added.

Occidental also pays a 1.5% dividend yield. The stock is about flat this year after dipping 5% in 2023.

The legendary investor said he took advantage of the elevated volatility in the market in early 2022 to acquire 14% of the energy firm, worth more than $7 billion, in just two weeks.

“I find it just incredible. You couldn’t do that with Berkshire. … Overwhelmingly, large companies in America, they became poker chips,” Buffett said in 2022. ”Imagine trying to [buy] 14% of the farms in this country; 14% of the apartment houses; 14% of the auto dealerships, or just anything, when already 40% were locked up some other place.”

Products You May Like

Articles You May Like

Eli Lilly expects FDA decision on weight loss drug Zepbound for sleep apnea as early as end of the year
Forever 21 seeks rent concessions as fast-fashion brand faces financial woes
The stock market is in its longest stretch without a 2% sell-off since the financial crisis
Home prices hit record high in May as sales stall
Consumer spending, inflation, and housing are 3 things to watch in the market next week

Leave a Reply

Your email address will not be published. Required fields are marked *