From past situations, 'Stock God' Buffett would make a large increase in holdings in Occidental Petroleum when the stock price is below $60 per share; However, the stock price of Occidental Petroleum has been below this level for nearly a month, but there has been no news of any action from Buffett's side; Some analysis suggests that this may mean he has decided to no longer increase his holdings in the stock, as his current position in the stock is close to 30%.
Financial Association News, August 22nd (Editor: Zhou Ziyi) US oil producer $Occidental Petroleum (OXY.US)$ stock price fell to $56.02 on Wednesday, August 21st, below the level at which the largest shareholder Warren Buffett's Berkshire Hathaway company usually buys. However, Berkshire Hathaway has yet to take any action.
In the past, Buffett's purchases of millions of shares of Occidental Petroleum usually occurred when the stock price fell below $60, and Wall Street analysts have set this price range as Buffett's 'buying window'.
But looking at the past month, the stock price of Occidental Petroleum has been below this level for the entire month, which is the longest continuous decline since January of this year.
In early February, after Berkshire Hathaway acquired 4.3 million shares of Occidental Petroleum stock, the stock ended the downward trend of January.
Possibly no longer increasing holdings.
Berkshire Hathaway is the largest shareholder of Occidental Petroleum, holding stocks worth $16.1 billion. It has even received approval from US regulatory agencies to acquire up to 50% of Occidental Petroleum's shares.
Historically, the decline of Occidental Petroleum usually triggers large-scale purchases by Berkshire Hathaway. This trend can be traced back to 2022, when Berkshire Hathaway's large-scale stock acquisitions were priced between $57.91 and $61.38.
In December of last year, while acquiring CrownRock, Occidental Petroleum was required to assume the latter's debt. Subsequently, the stock price of Occidental Petroleum fell, and Berkshire Hathaway quickly bought nearly 10.5 million shares of Occidental Petroleum, with a total value of nearly $0.59 billion. In early February, Berkshire Hathaway acquired 4.3 million shares of Occidental Petroleum, spending nearly $0.25 billion. In June, Berkshire Hathaway acquired 2.56 million shares of Occidental Petroleum at a price of $59.86 to $59.75 per share.
In addition to common stocks, Berkshire Hathaway also holds warrants to purchase 83.5 million shares of Occidental Petroleum at a price of $59.62 per share, and it holds preferred stocks of Occidental Petroleum worth $10 billion.
Analysts point out that this time Buffett did not buy Occidental Petroleum stocks during the "buying window", possibly because he decided not to increase his holdings in the company. As of now, Berkshire Hathaway's shareholding ratio is close to 30%.
In the past 52 weeks, the stock price of Occidental Petroleum has fallen by a cumulative 12.3%. Meanwhile, the SPDR Energy Select Sector Fund (XLE), which tracks the entire energy industry in the US, has also shown mediocre performance during the same period.
Editor/Somer