Warren Buffett, the renowned investor and CEO of Berkshire Hathaway, has recently made significant investments totaling $562 million in three companies: Occidental Petroleum, Sirius XM, and Verisign. These purchases have sparked interest among market observers, who are curious about Buffett’s perspective on the current stock market. Berkshire Hathaway acquired an additional 8.9 million shares of Occidental Petroleum between December 17 and 19, spending approximately $409 million.
This brings Berkshire’s total ownership in Occidental to around 28.2%. Buffett also holds $8.3 billion in Occidental’s preferred shares, which earn an 8% dividend. Buffett’s company has been gradually increasing its stake in Sirius XM, a satellite radio company, since the third quarter of last year.
The latest purchase of nearly 5 million shares for $107 million brings Berkshire’s total investment in Sirius XM to $2.7 billion. Berkshire Hathaway has also rekindled its interest in Verisign, a company that controls the registry rights to the .com and .net domains. Buffett’s recent purchase of $45 million worth of shares increases his total stake in Verisign to $2.6 billion, representing about 13.6% of the company.
Buffett’s recent investment moves
These investments come at a time when Berkshire Hathaway has been stockpiling cash. At the end of the third quarter of 2024, the company had over $320 billion in cash and short-term Treasury bills.
Some market observers see this as a signal that Buffett believes the market, which has set 57 all-time highs this year, may be due for a pullback. However, the recent purchases suggest that Buffett and Berkshire are finding value in certain stocks, despite their underperformance compared to the broader market. Occidental Petroleum, Sirius XM, and Verisign are all classic value plays that align with Berkshire’s investment strategy.
It is important to note that securities laws only require immediate disclosures for stocks in which Berkshire holds at least a 10% position. Therefore, it is possible that the company has made additional purchases or launched new positions that have not been publicly disclosed. While Buffett’s investments are always closely watched, it cannot be conclusively said that these recent purchases are a broad buying signal for the market.
Investors should still exercise caution, particularly with stocks trading at high valuations, and prepare for potential market corrections in the coming year.
