Warren Buffet’s Berkshire Hathaway took advantage of this week’s weakness in the market to buy shares of potential buyout target Occidental Petroleum (OXY).
The “Oracle of Omaha” started buying Occidental Petroleum shares in late 2019 and has continued to build a large position in the company. Today, Berkshire Hathaway’s total holdings of Occidental are approximately 28%.
Warren Buffett's Berkshire Hathaway is currently the largest shareholder of Occidental Petroleum, holding approximately 28.1% of the company's common stock.
In addition, Berkshire owns warrants to purchase further shares and holds preferred stock, giving it a significant stake in the company's operations and future growth potential.
Despite Buffet’s interest in the stock, Occidental Petroleum shares are trading in a long-term bear market trend.
The stock, which traded in a wide range from 2022 through this year, recently broke it’s trading range as it slipped below its 20-month moving average in August. That shift in long-term momentum marks the stock’s first bear market since 2019.
In 2019, Occidental Petroleum shares dropped into a bear market that stripped 85% of the company’s market cap over more than a year.
Incoming President Trump’s plan to open drilling for domestic oil and natural gas is likely to pressure those commodities prices lower over the coming years. Lower energy prices, while good for consumers, are bad for energy company revenues.
Today’s Buffet -driven rally has Occidental Petroleum shares trading at $47.50. The stock’s 50- and 200-day moving averages are overhead in a bearish pattern. This suggests that OXY is likely to shake-off this one-day price pop and maintain its move lower.
Investors should expect that a move below $45 will increase selling pressure with a short-term target of $40.
