Warren Buffett invested another $1.5 billion in Occidental Petroleum stock this week. Buffett’s Berkshire Hathaway has plowed $6 billion into the energy stock in eight trading days. Berkshire now commands a 13% stake, valued at $6.9 billion as of Friday’s close. Loading Something is loading.
Warren Buffett’s Berkshire Hathaway piled $1.5 billion into Occidental Petroleum in three days this week, meaning it’s now plowed about $6 billion into the energy stock over eight trading days.
The famed investor’s company snapped up 27.1 million shares between March 9 and March 11, regulatory filings show, after it spent about $4.5 billion to secure 91.2 million shares in the preceding week. The latest purchases boosted its stake by 30% to 118 million shares, worth $6.9 billion as of Friday’s close.
Buffett pounced on Occidental stock after digesting a transcript of the company’s fourth-quarter earnings call, held on February 25.
“I read every word and said, ‘This is exactly what I would be doing,'” the billionaire told CNBC. “We started buying on Monday, and we bought all we could.”
Occidental stock has soared 87% this year, reflecting surging oil prices and fears of supply disruptions due to Russia’s invasion of Ukraine. It has jumped by about 50% to $58 in the past two weeks alone, helped by Buffett building his position in that period.
Berkshire now owns about 13% of Occidental’s common stock. It already holds $10 billion worth of preferred shares in the oil-and-gas company, plus warrants to purchase 83.9 million common shares at an exercise price of $59.62. If Occidental’s stock price climbs past that level, Berkshire can exercise its warrants and sell the resulting shares for a profit.
The preferred stock and warrants stem from Berkshire’s $10 billion financing agreement with Occidental to help it acquire Anadarko Petroleum in 2019. Berkshire pockets about $800 million yearly from the deal, reflecting an 8% annual dividend on the preferred shares.
Buffett is looking to deploy around $80 billion of Berkshire’s almost $150 billion cash pile, but has struggled to find bargains with stocks near record highs, and SPACs and private-equity firms bidding up the price of acquisitions. His aggressive buying of Occidental stock signals he’s finally found an attractive place to put a chunk of his money.
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