On December 19, 2024, Warren Buffett (Trades, Portfolio) executed a notable stock transaction involving Occidental Petroleum Corp (OXY, Financial). This strategic move saw the addition of 8,896,890 shares at a price of $45.99 per share, impacting the firm's portfolio by 0.15%. This acquisition underscores Buffett's continued interest in the energy sector, particularly in companies that align with the firm's value investing philosophy. The transaction reflects a calculated decision to increase holdings in Occidental Petroleum, a company with significant operations in the USA, Latin America, and the Middle East.
Warren Buffett (Trades, Portfolio): The Oracle of Omaha
Warren Buffett (Trades, Portfolio), often referred to as "The Oracle of Omaha," is a highly respected investor and the Chairman of Berkshire Hathaway. Known for a disciplined approach to value investing, Buffett's strategy involves acquiring companies at a discount to their intrinsic value and holding them for the long term. This philosophy, influenced by Benjamin Graham, emphasizes patience and a deep understanding of the businesses in which the firm invests. Buffett's top holdings include Apple Inc (AAPL, Financial), American Express Co (AXP, Financial), and Bank of America Corp (BAC, Financial), reflecting a diverse investment portfolio.
Occidental Petroleum Corp: A Brief Overview
Occidental Petroleum is an independent exploration and production company with a market capitalization of $42.56 billion. The company operates in segments such as oil and gas, chemicals, and midstream marketing. With net proved reserves of nearly 4 billion barrels of oil equivalent and a net production average of 1,234 thousand barrels of oil equivalent per day in 2023, Occidental Petroleum is a significant player in the energy sector. The company's operations span the United States, Latin America, and the Middle East, making it a geographically diverse entity.
Details of the Stock Transaction
The recent transaction increased Buffett's total holdings in Occidental Petroleum to 264,178,414 shares, representing 28.15% of the firm's holdings in the stock. This substantial position now accounts for 4.55% of Buffett's overall portfolio. The decision to bolster the stake in Occidental Petroleum aligns with the firm's strategy of investing in undervalued companies with strong long-term prospects.
Financial Metrics and Valuation
Occidental Petroleum is currently considered modestly undervalued, with a GF Value of $54.14 compared to the current price of $45.36. The stock's PE ratio stands at 11.81, and it has a GF Score of 69/100, indicating poor future performance potential. Despite a year-to-date price change of -24.46%, the company has demonstrated a 3-year revenue growth rate of 14.90%. The profitability and growth ranks are 6/10 and 4/10, respectively, with a cash to debt ratio of 0.06.
Performance and Growth Indicators
Occidental Petroleum's financial health is reflected in its balance sheet rank of 5/10 and an interest coverage of 5.23. The company's Altman Z score is 1.44, indicating some financial risk. Despite these challenges, the company has maintained a gross margin growth of 6.40% and a operating margin growth of 0.00%. The stock's momentum rank is 2/10, suggesting limited momentum in the market.
Other Gurus Holding Occidental Petroleum
In addition to Warren Buffett (Trades, Portfolio), other notable investors holding shares in Occidental Petroleum include Dodge & Cox, Prem Watsa (Trades, Portfolio), and Smead Value Fund (Trades, Portfolio). Berkshire Hathaway Inc is the largest holder of Occidental Petroleum shares, further emphasizing the firm's confidence in the company's potential. This collective interest from prominent investors highlights Occidental Petroleum's appeal as a strategic investment in the energy sector.
Transaction Analysis
This acquisition by Warren Buffett (Trades, Portfolio) signifies a strategic reinforcement of the firm's position in Occidental Petroleum. The transaction not only increases the firm's stake in the company but also reflects a calculated bet on the energy sector's future prospects. By acquiring shares at a price below the GF Value, Buffett demonstrates a commitment to value investing principles, seeking to capitalize on the company's potential for long-term growth and profitability.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
