Berkshire Hathaway boosts Occidental stake to 25%. Why Warren Buffett loves this energy play so much
Warren Buffett's Berkshire Hathaway keeps buying the dip in Occidental Petroleum , now owning a quarter of the oil giant. The conglomerate purchased an additional 2.1 million Occidental shares on Monday, Tuesday and Wednesday, boosting its stake in the Houston-based energy producer to 25.1%, a new regulatory filing showed. Berkshire now owns 224.1 million shares, worth $12.9 billion based on Wednesday's closing price of $57.46. The buying spree this year came as Occidental shares pulled back after a stellar 2022. The stock is down nearly 9% in 2023 after soaring 117% last year, becoming the best performer in the S & P 500 for 2022. Occidental, once known for being founded by legendary oilman Armand Hammer, is now Berkshire's sixth-biggest equity holding. OXY 1Y mountain Occidental Buffett has ruled out the possibility of taking full control of the energy company. The legendary investor previously revealed that he started buying the stock after reading through Occidental's annual report and gaining confidence in the company's growth and its leadership. "Vicki Hollub, she's an extraordinary manager of Occidental. Her first job was with Cities Service. That was the first stock I bought in 1942. She knows what happens beneath the surface," Buffett said at Berkshire's annual meeting in May. "I know the math of it. But I wouldn't have the faintest idea what to do if I was in an oil field." Hollub is CEO of Occidental. In August, Berkshire received regulatory approval to purchase up to 50%, spurring speculation it may eventually buy all of Occidental. The 92-year-old investor also told shareholders that he's content with the warrants he owns, which were obtained as part of the company's 2019 deal that helped finance Occidental's purchase of Anadarko . "We may or may not own more in the future but we certainly have warrants on what we got on the original deal on a very substantial amount of stock around $59 a share, and warrants last a long time, and I'm glad we have them," he said. Berkshire also owns $10 billion of Occidental preferred stock, and has warrants to buy another 83.9 million common shares for $5 billion, or $59.62 each.