Warren Buffett recently attended the annual Berkshire Hathaway shareholders meeting in Omaha, Nebraska, where he discussed his increased stake in Occidental Petroleum. Over the past nine trading sessions, Buffett’s Berkshire Hathaway has been steadily acquiring more shares of the Houston-based oil and gas producer, bringing his ownership to nearly 29%.
According to regulatory filings, Berkshire Hathaway purchased an additional 7.3 million Occidental shares over the course of nine trading days, with prices hovering around $60 per share. This increased Berkshire’s total holding to over 255 million shares, representing a significant 28.8% stake in the company. Occidental Petroleum is now Berkshire’s sixth-largest stock holding, with Buffett becoming the company’s largest institutional investor.
In addition to the common shares, Berkshire also holds $10 billion of Occidental preferred stock and has warrants to purchase an additional 83.9 million common shares at a price of $59.62 each. These warrants were acquired as part of a deal in 2019 that helped finance Occidental’s acquisition of Anadarko Petroleum. With the stock closing at $60.2 on Monday, Buffett’s warrants are now “in the money,” potentially increasing Berkshire’s ownership of Occidental to over 40% if the preferred equity is fully redeemed.
Despite his significant stake in Occidental Petroleum, Buffett has clarified that he has no intentions of taking full control of the company. He commended Occidental CEO Vicki Hollub for her leadership, stating that she is “running the company the right way.” Buffett’s interest in Occidental was piqued after reading a transcript of the company’s earnings conference call, where he found the business strategy aligning with his own investment philosophy.
Occidental Petroleum also offers a 1.5% dividend yield to investors. The stock has remained relatively flat this year after experiencing a 5% dip in 2023. Buffett’s strategic acquisition of Occidental shares in early 2022, during a period of heightened market volatility, allowed him to quickly amass a 14% stake in the energy firm valued at over $7 billion.
Reflecting on his investment decisions, Buffett highlighted the unique opportunity to acquire a significant portion of a large company like Occidental in a short period, emphasizing the limitations faced when attempting a similar feat with other types of assets. He expressed admiration for Hollub’s management of Occidental and his confidence in the company’s future prospects within the energy sector.