Buffett’s Berkshire makes a new purchase of OXY approaching 20% ownership

Buffett’s Berkshire makes a new purchase of OXY approaching 20% ownership
4 weeks ago
2 mins read

Berkshire Hathaway (NYSE: BRK.A), run by the legendary investor Warren Buffett, dipped into Occidental Petroleum (NYSE: OXY) shares yet again. Namely, the investment conglomerate disclosed on Wednesday, July 13, that they bought another 4.3 million shares of OXY. 

Furthermore, according to an SEC filing, Berkshire bought shares of OXY each day this week, spread across multiple transactions at prices ranging from $56.11 to $59.93. Apparently, BRK.A spent roughly $250 million on the additional shares they just purchased, thus increasing the holdings to 179.4 million OXY shares, now roughly worth $10.4 billion. 

Moreover, a couple of weeks ago, Berkshire increased its stake in OXY to 16%, while the latest purchase brings their stake closer to 20% ownership, a threshold that would allow BRK.A to report its proportionate share of Occidental’s earnings with their own, similar to what they do with their Kraft Heinz (NASDAQ: KHC) stake.

OXY chart and analysis 

OXY shares closed yesterday’s trading session up by 1.1%, thus effectively making the stock up 86.77% year-to-date (YTD), making it one of the better performers in the entire stock market for 2022. Meanwhile, the long-term trend for the share price still seems to be positive, with a support zone formed around $55.08 and resistance around $58.82. 

OXY 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

For now, analysts rate the shares a moderate buy, predicting that the average price the stock could reach in the next 12 months could be $74.44, 28.32% higher than the current trading price of $58.01.

Wall Street analysts’ price targets for OXY. Source: TipRanks  

In the end, Berkshire will enjoy roughly $800 million of annual dividends from OXY; also they own warrants, which entitle them to buy another 83.9 million common shares. 

Some would argue that there is a possibility for BRK.A to outright buy all of OXY, but for now, that is in the realm of speculation. 

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

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Dino Kurbegovic

Dino is an investor and technology enthusiast with years of experience in managing complex projects. At Finbold he covers stories on stocks, investing, micro and macroeconomic trends. Also, he’s also building a micro solar power plants in his hometown.