Warren Buffett, the legendary investor, recently made seven new stock purchases in the second quarter of 2024. These purchases provide a range of opportunities for value investors. During Q2, Buffett initiated new positions in only two stocks: aerospace and electronics company Heico and cosmetics retailer Ulta Beauty.
He also acquired 7.26 million additional shares of Occidental Petroleum, which now ranks as Berkshire’s sixth-largest holding. Buffett increased Berkshire’s position in the big insurer Chubb, adding 1.11 million shares. This follows last year’s initiation of a position in Chubb, which now ranks as Berkshire’s ninth-largest holding.
Additionally, Buffett bought shares of Liberty SiriusXM Group Class A and Class C, reflecting Liberty Media’s interest in Sirius XM Holdings.
Buffett’s promising stock picks
He also acquired 96.2 million shares of Sirius XM itself, boosting Berkshire’s stake in the satellite radio and podcast company by over 262%.
Value investors might appreciate several of the stocks Buffett bought in Q2. Sirius XM trades at just below 12 times forward earnings, Chubb’s forward earnings multiple is 11.9, and Occidental Petroleum is even cheaper at 11 times forward earnings. Among Buffett’s Q2 purchases, the standout for value investors would have been a tie between Liberty SiriusXM Group Class A and Class C stocks, which were trading at a little over 6.5 times forward earnings.
However, these stocks are no longer available for purchase following a merger between Sirius XM Holdings and Liberty SiriusXM Group, along with a 1-for-10 stock split. With Liberty SiriusXM Group stocks out of contention, Occidental becomes the clear pick for value investors. In addition to its low valuation, Occidental’s investment in direct air capture technology could potentially yield massive long-term benefits.
Overall, Buffett’s recent stock picks present a range of intriguing options for value investors, with Occidental Petroleum standing out as the most promising based on current valuations and future potential.
