Berkshire Hathaway (Belatedly) Buys Oxy Dip
Warren Buffett goes back to the (oil) well for another 5.98 million shares of Occidental Petroleum
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Can’t Stop, Won’t Stop: Berkshire Buys More Oxy
After spending most of Tuesday night refreshing the SEC’s EDGAR website, waiting in vain for news of Berkshire Hathaway snapping up more Occidental Petroleum stock, I went to bed a bit puzzled.
It had been seven weeks since Berkshire last bought any shares of the Texas oiler — despite some erroneous reports to the contrary — but OXY 0.00%↑ dropped below $60 last Friday (September 23) and stayed there for the better part of four days.
If Buffett was a buyer on that Friday — as he usually was whenever the price fell below $60 — then he had two business days to report any purchases to the SEC.
Hence my wasted Tuesday night.
I started to wonder if Buffett had turned his attention elsewhere or lowered his preferred purchase price.
Wrong on both counts.
It came a day later than expected, but we learned on Wednesday that Buffett bought nearly six million additional shares of Oxy over the first three days of the week at prices ranging from $57.91 to $61.37.
That boosts Berkshire’s stake to 20.9% of the company (not including unexercised warrants from the Anadarko deal).
Timing aside, I’m not at all surprised that Berkshire pounced on Oxy’s recent dip in price.
But I am intrigued by two points in particular:
(1) Why didn’t Buffett buy any shares on Friday (9/23), when Oxy traded below $59 for most of the day?
(2) Most of Wednesday’s shares were purchased at $61.37, which marks the highest price that Berkshire has ever paid for Oxy. Will Buffett continue to buy more in the low $60s?
On two other occasions — July 1 and August 8 — Berkshire paid more than $60 for Oxy shares, but only went slightly over in both cases. Now, though, the $60 barrier may have fallen for good.
Let me know what you think down in the comments below.
Please enjoy my first DALL-E creation of (appropriately enough) a bull fighting a bear. Supposedly in Art Deco style, but I don’t really see it.
My actual first attempt was a Renaissance painting of Warren Buffett working on an oil derrick (for this Oxy article), but apparently that ran afoul of DALL-E’s terms of service and could not be made.
Better luck next time.
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Disclosure: This is not financial advice. I am not a financial advisor. Do your own research before making any investment decisions.
Buffet put.
$OXY S/O at 6/30/22 was 931,491,947 (per 10-Q) with subsequent repurchase of ~6.8 million thru 8/1/22 (per 10-Q), which puts $BRK stake of 194,351,650 shares (excl warrants) (per Form-4) at 21.02%. Note company repurchases in Q3 have been at <$62/sh, with $1.93b remaining in authorization which company indicates in the Q2 earnings call will be deployed.