Warren Buffett Keeping His Investment Simple, Buying More of His Favourite “Boring” Stock Occidental Petroleum

Warren Buffett Keeping His Investment Simple, Buying More of His Favourite “Boring” Stock Occidental Petroleum

Every billionaire and major investor has one thing in common, that is, having an investment style for their fund and sticking to their money-making trick for pretty much their entire lives. The same can be said for the fifth-wealthiest man in the world, the 92-year-old Warren Buffett, who is the CEO of American multinational conglomerate holding company Berkshire Hathaway.

Buffett, who has been overseeing the Nebraska-based Berkshire Hathaway since 1965, has a penchant for keeping his investment in the simplest form, and that profitable method of his is likely to go away anytime soon. One example of this is his continued confidence in Occidental Petroleum stocks.

Another 6 Million Shares of Occidental Petroleum Bought by Berkshire Hathaway

The new year of 2023 is not witnessing outstanding performances by energy stocks so far, but that does not prevent Buffett’s Berkshire Hathaway from getting more stakes from his favourite stock type. In recent days, or the past week, to be exact, the conglomerate holding company purchased another 6 million shares of Occidental Petroleum, propelling the company’s stake in the company to reach $12.2 billion worth of stocks (200.2 million in volume). This buy instantly made the Houston-based big energy company to be within ranks of Berkshire’s largest 10 holdings at the moment.

For Buffett to have an eye for Occidental stocks, that speaks volumes about his belief over the energy company. Some of the reasons behind could be the company’s domestic revenues, which accounted about 85% of their total profits, or even its diversities in the product and service range that spread to regional markets such as the Middle East. On top of these, Occidental Petroleum’s stocks do not come at a hefty price tag, as compared to its peers, hence the space of value appreciation is largely promising.

A Faithful Believer in Energy Companies

It is no secret that Warren Buffet likes energy companies. Not only has Berkshire Hathaway own millions of volumes of shares in Occidental Petroleum, the Omaha-based company whose CEO is Buffet, also holds around $27 billion in Chevron, an oil and gas-dominant company in San Ramon, California.

What Is Buffet Cooking?

Berkshire started to buy Occidental stocks towards the end of 2022, a year where energy stocks were performing well, with the energy company being the best performer in the S&P 500 last year, more than a double in increase in price. Buffett’s plan to bring in more stocks from the big energy company this year even prompted more questions by the public, as to whether he is plotting a move to buy out the Houston-based company at this rate. If that is exactly what Buffett is looking forward to do, he would have to bear in mind that oil prices may go up at the end of 2023.

What Is Exactly Buffett’s Investment Strategy?

Buffett is a strong advocate for long-term investments, which means he will be making decisions based on the stock’s future prospects in the long run, coupled with the company’s stability, quality management style, etc. For instance, Berkshire Hathaway’s purchase over Coca-Cola’s stocks was at 400 million shares, costing him about $1.3 billion. The amount of money he spent on that particular investment seemed reckless in 1994, but the dividend it produced over the years was enormous. In a recent Berkshire statement he wrote to address his investors, Buffett mentioned: “The cash dividend we received from Coke in 1994 was $75 million. By 2022, the dividend had increased to $704 million. Growth occurs every year, just as certain as birthdays.”

Should You Buy Occidental Then?

The answer is no, at least not now. Knowing the company is given a “Hold” tag among analysts as well as the prospects not being mentioned by Wall Street’s top notch researchers, you should probably reroute your investment choice to somewhere else and come back later when a detailed assessment regarding Occidental Petroleum is available.

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