Warren Buffett’s Berkshire Hathaway has been on a buying spree when it comes to shares of Occidental Petroleum. In fact, over the past nine trading sessions, Berkshire has been consistently increasing its stake in the Houston-based oil and gas producer. This recent surge has brought Berkshire’s holding to almost 29%, making them the largest institutional investor in Occidental.
Berkshire Hathaway has not only acquired more shares of Occidental Petroleum but also holds $10 billion of Occidental preferred stock with warrants to purchase additional common shares. The strategic investment in Occidental was part of a deal in 2019 that helped finance Occidental’s purchase of Anadarko Petroleum. With the recent rise in Occidental’s stock price, Buffett’s warrants are now “in the money,” presenting a profitable opportunity for Berkshire.
Warren Buffett’s decision to invest in Occidental Petroleum was based on thorough research and analysis. After reading a transcript of the oil company’s earnings conference call, Buffett was convinced that Occidental was a worthy investment. He praised CEO Vicki Hollub for running the company efficiently and expressed confidence in the company’s future prospects. Buffett’s investment philosophy focuses on long-term value and sustainable growth, which aligns well with Occidental’s business strategy.
Berkshire’s Growing Influence
With Berkshire Hathaway’s stake in Occidental Petroleum approaching 29%, there is speculation that Berkshire’s ownership could potentially exceed 40% if the preferred equity is fully redeemed. Despite this significant ownership stake, Buffett has clarified that he has no intention of taking full control of the oil company. Berkshire’s increasing influence in Occidental reflects Buffett’s confidence in the company’s management and long-term growth potential.
As Occidental Petroleum continues to navigate the challenges and opportunities in the energy sector, Berkshire Hathaway’s support and investment will play a crucial role in shaping the company’s future. Buffett’s strategic investment in Occidental is a testament to his long-term vision and disciplined approach to investing. With Berkshire’s substantial stake in Occidental, the company is well-positioned to benefit from any potential growth opportunities in the energy market.