Berkshire Hathaway, led by CEO Warren Buffett, has taken advantage of the recent weakness in Occidental Petroleum stock to further increase its already substantial holding in the energy company. With 243.7 million shares, Berkshire Hathaway now owns a 27.7% stake in Occidental Petroleum.
In late December, Berkshire Hathaway purchased an additional 5.2 million shares at an average price of approximately $60 per share. However, the current price of Occidental shares is $56.80, representing a 1.2% decrease and its lowest closing price of 2024.
The decline in Occidental’s stock price is in line with the overall selloff in energy stocks, as crude oil prices have fallen by over $2 per barrel to around $71.25 (WTI crude). This downward pressure on energy stocks has prompted Berkshire Hathaway to potentially make further acquisitions.
Should Berkshire Hathaway have purchased more Occidental Petroleum stock this week, a regulatory filing will likely be disclosed later today. As per regulatory requirements, Berkshire Hathaway is obligated to report any purchase or sale of Occidental stock within two business days due to its ownership of over 10% of the company.
Berkshire Hathaway has historically filed its Occidental purchase reports in the evening, and therefore, an announcement is expected soon. The company, however, has declined to provide immediate comments regarding these recent developments.
On Monday, there was a significant increase in trading volume for Occidental Petroleum, with over 10 million shares changing hands compared to the average of approximately 8.5 million shares on Wednesday.
Warren Buffett initiated the accumulation of Occidental stock in early 2022, and Berkshire Hathaway currently holds around $13.9 billion worth of the company’s shares. It is worth noting that the average cost for the majority of Berkshire Hathaway’s holdings lies in the mid-50s range, indicating that significant profits may not be expected at this point.
Warren Buffett has consistently displayed discipline when acquiring Occidental stock, typically purchasing shares below the $60 mark. This prudent approach has allowed him to capitalize on opportunities whenever the stock price drops below this threshold in the past year.