Stock Markets Analysis and Opinion

Occidental: What Warren Buffett’s 9-Day Buying Streak Means for the Stock

2024.06.20 09:34

Warren Buffett’s Berkshire Hathaway (NYSE:) (NYSE:) has been aggressively buying shares of Occidental Petroleum Corporation (NYSE:) over the past nine trading sessions, increasing its stake to nearly 29%. This significant buying spree follows Berkshire’s acquisition of a new position in Chubb (NYSE:) Ltd. last month.

This recent purchase brings Berkshire Hathaway’s ownership to nearly 29% of Occidental Petroleum. The company revealed in a filing that it made three separate purchases of Occidental shares between June 13th and 17th, averaging just under $60 per share, with a total investment of approximately $176 million.

Buffett’s confidence in Occidental is further underscored by his existing warrants to buy an additional 83.5 million shares at a discounted price of $59.62 per share, well below the current market price of $61.26 (as of Wednesday’s closing).

The news of Buffett’s increased stake sent Occidental’s share price up by 1.76% on Tuesday, following a US market closure on Monday due to a bank holiday. This rise could be the beginning of a sustained upward trend for Occidental.

It’s worth noting that Occidental’s share price had fallen 15.4% from its April 11th peak of $71.18 by Monday’s close, before news of Buffett’s additional purchase became public.

However, the stock showed signs of stabilization in early June, finding support just below $60. This stability likely influenced Buffett’s decision to increase his stake, suggesting he believes the stock has reached an attractive buying point.OXY Daily Chart

As it turns out, valuation models consider Occidental Petroleum to be slightly undervalued at its current price. Indeed, the InvestingPro Fair Value, which synthesizes several recognized financial models, stands at $66.32, or 8.26% above the current price.

OXY Fair Value

Source: InvestingPro

Analysts are more optimistic, with an average target of $71.96, which translates into a potential upside of 17.5%. However, the very fact that Buffett owns the stock gives it an aura and premium that could carry it higher than we think.

Indeed, tens of thousands of Buffett fans scrupulously imitate the legendary investor’s positions. And given his long-term performance, it actually makes sense.

How to Easily Monitor Buffett’s Holdings

Aware of the popularity and relevance of this approach, Investing.com has integrated the “Ideas” section into its InvestingPro platform, listing the positions taken by dozens of funds, banks, and major investors, including of course Warren Buffett.

Each portfolio can be analyzed in depth, and some or all stocks can be copied to your watchlist for easier monitoring.

Buffett Portfolio

Source: InvestingPro

The section also features a search engine for finding trading ideas that match your specific requirements.

InvestingPro offers another solution for building a Buffett-inspired stock portfolio, with the ProPicks “Buffett’s best” strategy, an AI-managed portfolio that selects the crème de la crème of stocks in the investor’s portfolio.

This low-risk strategy has returned 381.2% over the past 10 years, outperforming the S&P 500 by 158.1%!

Best of Buffet

Source: InvestingPro

Note that this strategy is offered alongside 5 other thematic portfolios also managed by IA, including our flagship strategy, Titans de la Tech, which has returned over 68% since October 2023 in real conditions and over 1800% over a 10-year backtest!

Conclusion

Warren Buffett’s recent purchase of Occidental Petroleum signals his belief that the stock’s recent slump is nearing an end, aligning with other positive indicators.

However, Occidental Petroleum isn’t the only intriguing holding in Buffett’s vast portfolio. Explore his investment picks further using InvestingPro’s powerful tools and uncover the hidden gems within his strategy!

***

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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.



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