Warren Buffett is still buying Occidental Petroleum (OXY) stock, as Berkshire Hathaway (BRKB) loaded up on shares in the last three trading days, even as U.S. crude prices have retreated recently.
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Billionaire investor Warren Buffett purchased 4.66 million OXY shares for about $275 million over May 25-30. On Tuesday, Buffett picked up 2.2 million shares. Berkshire's buy range in the past three trading days for Occidental Petroleum stock was 58.30-58.85.
With Berkshire Hathaway's recent OXY purchases, Buffett now holds 222 million OXY shares worth around $13 billion, or a 24.9% stake in the company. Buffett has been on an Oxy buying spree on May. Between May 11-18, the Berkshire purchased Occidental Petroleum in six straight trading days.
Meanwhile, U.S. crude futures fell 2.2% to $67.93 per barrel Wednesday, extending the monthly loss for May to around 11%. U.S. oil prices are now approaching their 2023 lows of $67.12 amid concerns surrounding a slowdown in demand from top crude importer China. The Organization of the Petroleum Exporting Countries and its allies, including Russia, is also set to meet Sunday. Analysts do not expect any policy change from the oil cartel.
Occidental Petroleum stock fell 1.5% to 57.69 Wednesday during market trade. On Tuesday, OXY dropped 0.6% to 58.59. Ahead of Wednesday trade, the stock was down around 4.8% in May and has declined 12% since it hit a recent high of 66.47 on April 3.
Warren Buffett Loves OXY
Through the latter half of 2022 Buffett loaded up on OXY stock, with the billionaire investor targeting shares in the $57-$61.50 price range.
Berkshire has substantially increased its stake in the international oil play over the past year, putting OXY among Buffett's top holdings.
On May 9, Occidental Petroleum missed first-quarter earnings views as sagging oil and natural gas prices weighed down profits. OXY reported revenue slipping 13% to $7.26 billion in Q1 as earnings sank 48% to $1.09 per share. Pretax income from oil and natural gas sank 36% to $1.6 billion in Q1 due to lower worldwide crude oil and U.S. natural gas prices.
Cash flow from operations came in at $2.9 billion, falling 10% compared to Q1 2022. Meanwhile, free cash flow dropped 33% in Q1, totaling $1.69 billion. Occidental Petroleum repurchased $752 million worth of stock, on pace for its 2023 $3 billion repurchase program.
Buffett Won't Take Control Of Occidental
Ahead of earnings, Buffett said Berkshire had no plan to maneuver into a position of control over OXY.
"We will not be making any offer for control of Occidental," Buffett said during Berkshire Hathaway's annual shareholder meeting.
In August 2022, the Federal Energy Regulatory Commission granted Buffett and Berkshire Hathaway approval to purchase up to 50% of available OXY stock.
"We love the shares we have," Buffett told investors earlier this month. "We may or may not own more in the future but we certainly have warrants on a very substantial amount of stock.
"I'm glad we have them."
Occidental Petroleum stock ranks sixth in the Oil & Gas-International Exploration and Production industry group. OXY has a Composite Rating of 30. Occidental Petroleum stock has a 34 Relative Strength Rating. OXY shares have an EPS Rating of 25.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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