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Berkshire Hathaway Stock Hits a Record High. Buffett Can Thank Occidental, Not Apple.Author: Denton, Jack Barron's (Online) ; New York (Mar 17, 2022). The Sage of Omaha just can't keep his hands off Occidental Petroleum stock. Warren Buffett's Berkshire Hathaway (ticker: BRK.A and BRK.B) scooped up even more shares in Occidental Petroleum (OXY) in recent days, according to regulatory filings on Wednesday, bringing its stake in the oil company to $7.2 billion. It's news that might have been missed on a manic day for markets . Wednesday saw Hong Kong stocks notch the biggest gains since 2008 and U.S. investors reacted to a hotly anticipated interest rate increase from the Federal Reserve. But Berkshire's growing interest in Occidental is worth paying attention to. As Barron's has reported , the conglomerate holding company run by the 91-year old CEO Buffett has been on an "uncharacteristically aggressive buying spree" with Occidental; Buffett is typically less public about his purchases. Having bought more than 18 million shares in Occidental this week — and more than 100 million shares since March 2 — Berkshire's interest in the group now stands at 14.6%, or 136.4 million shares. There is speculation that Buffett might want to buy the whole company . Nevertheless, shares in both the investment group and its latest darling have been rising. Berkshire's Class B stock — the one most commonly held by retail investors —rose 1% Wednesday; it was trading flat in premarket trading Thursday. Berkshire's Class A shares hit a record high on Wednesday of $504,036, up from around $20 when Buffett took the helm at Berkshire almost 60 years ago. Recent increases in Berkshire's share price — the stock has gained almost 12% this year, compared to a 9% fall in the wider S&P 500 index — has come despite the fact that its single-largest holding is down in the dumps. Berkshire owns some 5% of Apple (AAPL) in a stake it mostly built between 2016 and 2018, and in the past has ridden the coattails of the iPhone maker as its shares have gone higher and higher. Buffett's success in 2022 is all the more notable since Apple stock has fallen more than 12% so far this year, caught up in a broader selloff in the tech sector. The gains are much more staggering for Occidental, which ticked up 3% in Thursday's premarket after slipping more than 2% Wednesday. The shares are up some 13% since Berkshire began building its big stake at the beginning of March. As an oil company, Occidental has benefited from an intense surge in oil prices linked to the Russia-Ukraine war, which has also lifted the stocks of peers like Exxon Mobil (XOM), Chevron (CVX), and ConocoPhillips (COP). Even relative to its peers, Occidental's rise is eye-watering. While Exxon stock has climbed more than 20% in 2022, with Chevron and Conoco in the gain-range of 30%, shares in Occidental are up more than 70% so far this year. And analysts continue to be bullish on the stock. Occidental is overwhelmingly rated at Buy among brokers surveyed by FactSet, though the recent climb in the share price has diluted future gains implied by analysts' target prices. The average target on Occidental stock is $53.56, implying a 1% rise from Wednesday's closing level but slightly short of where the shares are set to open on Thursday. Write to Jack Denton at jack.denton@dowjones.com Berkshire Hathaway Stock Hits a Record High. Buffett Can Thank Occidental, Not Apple. Credit: By Jack Denton ------------------------------------------------------------------------------------------------------------------ Buffett Buys Again: Berkshire Hathaway Boosts Its Stake in Occidental Petroleum to 14.6% Author: Bary, Andrew Barron's (Online) ; New York (Mar 17, 2022). Berkshire Hathaway continued to add to its large stake in Occidental Petroleum in recent days and now holds a $7.2 billion interest in the big energy company, according to a filing late Wednesday. Berkshire Hathaway (ticker: BRK/A, BRK/B) purchased 18.1 million shares from Monday through Wednesday to bring its stake to 136.4 million shares, a 14.6% interest in Occidental Petroleum (OXY). Berkshire, led by CEO Warren Buffett, has been on an uncharacteristically aggressive buying spree involving Occidental. Berkshire has bought more than 100 million shares since March 2. The buying has spurred speculation that Buffett may ultimately want to purchase the entire company . Buffett, who oversees Berkshire's $350 billion equity portfolio, normally accumulates stakes in companies quietly over time. It's unusual for Buffett to be so aggressive and public about his purchases. As a holder of more than 10% of Occidental, Berkshire must report any changes in its stake publicly within two business days through a Form 4 filing with the Securities and Exchange Commission . Berkshire paid in a range of about $53 to $55 a share for the latest batch of Occidental stock, which ended Wednesday at $52.99, down 2.8% on the day. Berkshire shares hit a record Wednesday with the Class A stock ending at $504,036, up 1.2%, in the first close above the $500,000 mark. The stock stood at around $20 when Buffett took control of the company in 1965. Berkshire's Class B shares ended at $336.11, up 1.1%. Buffett knows Occidental well. Berkshire bought $10 billion of Occidental preferred stock paying a lush 8% dividend in 2019 when Occidental CEO Vicki Holub was seeking quick financing during a bidding war with Chevron for Anadarko Petroleum. Occidental won due in part to the Berkshire financing. Berkshire got 83.9 million warrants to buy Occidental stock as part of that deal. They have an exercise price of $59.62 a share. Occidental produces about 1.2 million barrels of oil equivalent daily and has been an industry leader in carbon capture. The company was burdened by high debt from its 2019 purchase of Anadarko Petroleum, but it has been rapidly paying that down thanks to the rally in energy prices. Occidental CEO Holub said in February that the company aims to get its net debt down to under $25 billion by the end of the first quarter. The shares are up from a low of under $10 in 2020. Buffett doesn't tend to like pricey stocks. Occidental trades for around 11 times projected 2022 earnings, but the company's profits are highly sensitive to energy prices. He also has no qualms about owning energy companies, unlike some socially conscious investors. Write to Andrew Bary at andrew.bary@barrons.com Buffett Buys Again: Berkshire Hathaway Boosts Its Stake in Occidental Petroleum to 14.6% Credit: By Andrew Bary |
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