Warren Buffett Acquires $435 Million Worth of Stock, Intends to Keep Long Term

Warren Buffett, the legendary investor, has made some notable moves in the stock market recently. As the head of Berkshire Hathaway, Buffett has been strategic in his investment decisions, often making headlines with his buys and sells. In the current market environment, Buffett has been relatively restrained in terms of new purchases, but one stock that has caught his eye is Occidental Petroleum (NYSE: OXY).

Buffett initially invested in Occidental in 2019 with a $10 billion stake in preferred shares. This investment helped Occidental finance its acquisition of Anadarko, a move that strengthened its position in the Permian Basin. Despite facing challenges like the COVID-19 pandemic, Occidental managed to weather the storm, suspending dividends and selling assets to reduce debt.

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Fast forward to today, Buffett has continued to add to his position in Occidental. With a recent $435 million purchase, Berkshire Hathaway now owns about 28.8% of Occidental’s outstanding shares, making it the sixth-largest holding in Berkshire’s portfolio. In a letter to shareholders, Buffett expressed his admiration for Occidental CEO Vicki Hollub and affirmed his intention to hold onto the stock indefinitely.

One key factor that makes Occidental an attractive investment is its position in the Permian Basin. The company is set to expand its presence in the region with the $12 billion acquisition of CrownRock, expected to close in the third quarter. This move, coupled with the company’s focus on reducing debt and generating cash flow, bodes well for its long-term growth prospects.

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While Occidental is an oil-dependent company, its focus on increasing cash flow and managing costs has positioned it well to benefit from rising oil prices. Buffett’s continued interest in the stock, even during market dips, suggests confidence in Occidental’s potential for sustained growth.

Investors looking to follow in Buffett’s footsteps may consider Occidental as part of their portfolio. While the stock may not be as attractively valued as some of its peers, the company’s aggressive growth strategy and focus on profitability could lead to significant returns in the future. As always, it’s important to conduct thorough research and consult with a financial advisor before making any investment decisions.

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