Berkshire Hathaway increases stake in Occidental

Warren Buffett has been buying shares of oil company Occidental Petroleum for nine straight days. This has increased Berkshire Hathaway’s stake in the Houston-based firm to nearly 29%. Buffett’s interest in Occidental began after reading a transcript of the company’s earnings call. “I read every word, and this is exactly what I would be doing,” he told CNBC. The exact reasons for Berkshire’s interest are not entirely clear. Leo Mariani, a senior energy analyst for Roth Capital, said, “That’s been a question people have been asking for quite some time. I’m not sure anybody has a perfect answer.” Berkshire’s significant involvement with Occidental started in 2019. It committed $10 billion to the firm’s bid for rival Anadarko.

Buffett’s evolving energy investments

This gave Berkshire the right to buy Occidental shares. By 2022, Berkshire had approval to buy up to 50% of the company’s shares. Greggory Warren, a senior stock analyst for Morningstar, suggested the increased stake reflects Buffett’s desire to diversify Berkshire’s portfolio. “The stuff that Berkshire buys in scale like this is more a function of what they can buy as opposed to huge preferences one way or another,” he said. Despite Buffett’s interest, Occidental’s outlook isn’t entirely positive. In early May, Morningstar lowered its fair value estimate of the company’s stock by 7% to $53 per share. This was due to lower oil prices and the slow progress of Occidental’s planned acquisition of shale oil producer CrownRock. The evolving strategy and deeper investment underscore Berkshire’s broad approach. It leverages long-standing relationships and navigates opportunities in the energy sector, even amid market changes.