Warren Buffett’s Berkshire Hathaway has bought more shares of Occidental Petroleum. This comes after the oil and gas producer’s stock fell more than 30% from its record high. Berkshire acquired 763,017 shares of the Houston-based energy company on Friday.
The purchase cost $35.7 million, according to a regulatory filing. This underscores Berkshire’s confidence in Occidental, despite the company’s recent stock challenges. Berkshire is Occidental’s biggest investor.
It holds a 28.2% stake. Shares of Occidental have fallen nearly 32% from an all-time high reached last April. They dropped more than 17% in 2024 as oil prices weakened.
Occidental remains Berkshire’s sixth-largest equity holding. Buffett has made clear he won’t take full control of the oil company.
Buffett increases Occidental stake
It was founded by legendary oilman Armand Hammer. There had been speculation of a takeover after Berkshire secured the right to buy as much as a 50% stake. Buffett said he started buying Occidental shares after reading a transcript of the oil company’s earnings conference call.
Occidental offers a 1.8% dividend yield. It has been investing in a carbon capture business. This signals its forward-thinking approach to energy production.
Berkshire also owns $10 billion of Occidental preferred stock. It has warrants to buy another 83.9 million common shares for $5 billion, or $59.62 each. The warrants were obtained as part of a financing deal with Occidental.
This move by Berkshire signals Buffett’s ongoing strategy. He invests in undervalued companies with strong fundamentals and future growth potential.
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