Warren Buffett’s company, Berkshire Hathaway, recently purchased $563 million of stock in three companies: Occidental Petroleum, Sirius XM, and VeriSign. Berkshire had to disclose these purchases because it already holds more than a 10% stake in each company. Buffett and Berkshire now own 264.2 million shares of Occidental Petroleum, which is 28.2% of the company and 4.2% of Berkshire’s portfolio.
They also own 117.5 million shares of Sirius XM, which is 34.6% of the company, and 13 million shares of VeriSign, which is 13.6% of the company. None of these stocks has performed well this year despite the broader market being up close to 26%. However, they are all classic value plays that Buffett and Berkshire have had success with in the past.
Occidental, a domestic oil company, has struggled due to falling oil prices and a bleak outlook for oil in 2025. Sirius XM, the parent of Sirius Satellite Radio and Pandora, has also struggled due to subscriber trends.
Buffett’s diversified stock acquisitions
VeriSign has underperformed due to regulatory concerns and questions about its market and future growth. It’s possible that Buffett and Berkshire are starting to see buying opportunities in the market. However, they likely view the market as broadly overvalued, with pockets of opportunity.
Market breadth is poor right now, so many stocks in the S&P 500 haven’t performed well this year, and a limited number of names have carried the market. All three stocks Berkshire recently purchased haven’t performed well and trade at fairly reasonable valuations. Investors should still be wary of stocks trading at sky-high valuations and prepare for some potential pullback or correction in 2025.
However, there are buying opportunities in the market for those who do their homework. While it’s interesting to see Buffett and Berkshire making substantial purchases, caution remains essential for the average investor. The market’s overall valuation remains high, and specific opportunities require thorough research and a long-term perspective.
