Despite what Warren Buffett’s overall reputation might suggest, not all of his stock picks have been winners.
In 2024, this fact is showcased by the fortunes of ‘The Oracle of Omaha’s’ sixth-largest bet and second-biggest energy holding, Occidental Petroleum (NYSE: OXY), which is, at press time on October 23, trading near its 2.5-year lows.
Indeed, OXY stock – which made up 5.6% of the Buffett portfolio, per the latest 13-f filing – is 13.24% in the red year-to-date (YTD) and an even deeper 17.06% down in the last 12 months.
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With their press time price of $52.10, Occidental Petroleum shares are trading at lows not seen since late February 2022.
Still, the long-term chart provides some silver lining: At the very least, OXY stock is well above the lows it was at between early 2020 and the early months of 2022 and has seen some price stabilization in the last 30 days.
Why is OXY stock down to 30-month lows?
The Occidental Petroleum stock downturn can and has been linked to a multitude of factors, though the primary concern cited are the generally depressed oil prices in recent years.
This particular issue has, in recent years, been exacerbated by the situation in China.
On the one hand, there is some doubt about the future demand for black gold in the People’s Republic due to efforts to transition to a greener economy and society – perhaps most notably exemplified by the rise of the Chinese electric vehicle (EV) maker BYD.
BYD, for example, sold more vehicles than the American EV giant Tesla (NASDAQ: TSLA) for the first time in the final trimester of 2024.
Additionally, U.S. oil companies have been having issues securing resources when competing with firms like China Petroleum, as seen in the People’s Republic’s significant involvement with the Iraqi energy sector, secured in the wake of the invasion.
Along with the problems more directly related to oil, Occidental Petroleum has been facing some business issues stemming from its 2019 acquisition of Anadarko Petroleum. The subsequent purchase of CrownRock for $12 billion exacerbated the situation, while the former has proven particularly troublesome as it was mostly financed by debt.
Finally, in October 2024, OXY stock is facing some additional risks as its operations in the Persian Gulf are endangered by the highly volatile situation in the Middle East and could be severely damaged should there be another – and bigger – escalation between Israel and Iran.
Is OXY stock Warren Buffett’s biggest miss?
Whatever the future may hold for Occidental Petroleum, it is, at press time, one of Warren Buffett’s most troubled holdings.
Not only did Berkshire Hathaway (NYSE: BRK.A, BRK.B) invest hundreds of millions into the company, but much of the purchase was made at times when OXY shares were trading in the $60-$70 range, meaning ‘The Oracle of Omaha’ is almost certainly in the red on the stock.
The 2024 trends, plagued with decline and dire technical signals emerging from time to time, hint that the legendary investor’s situation is not likely to change in the foreseeable future.
Still, it is worth pointing out that the latest 13-f covered the period ending June 30 and could, by October 21, be exceptionally dated – particularly since Buffett has been reshuffling his holdings, as exemplified by the massive sales of Bank of America (NYSE: BAC) and purchases of Sirius XM Holdings Inc (NASDAQ: SIRI).
The next filing, scheduled for release in mid-November, will likely hold numerous revelations, including answering whether ‘The Oracle of Omaha’ sold his OXY stake, held tight, or perhaps even ‘bought the dip.’
