owns a 9.8% stake in
worth $5.1 billion after furious buying activity in shares of the big energy company this past week.
Berkshire Hathaway (ticker: BRK.A and BRK.A) disclosed late Friday in a form 4 filing with the Securities and Exchange Commission that it held 91.2 million shares of Occidental Petroleum (OXY), up from 29.8 million shares on Tuesday, which was disclosed in a separate 13-G SEC filing on Friday.
From Wednesday through Friday, Berkshire bought more than 60 million shares of Occidental, fueling a surge in the energy company’s share price. The biggest daily gain occurred Friday, when Occidental surged 17.6%, or $8.40, to $56.15. That was the date of Berkshire’s heaviest buying.
Berkshire bought 34 million shares of Occidental on Friday at prices ranging from $48 to $56 as volume spiked to 100 million shares, against more recent daily volume in the 15 to 20 million share range.
The purchases were probably made in large part by CEO Warren Buffett who oversees Berkshire’s $350 billion equity portfolio. Buffett’s two investment lieutenants, Todd Combs and Ted Weschler, run a combined $34 billion for Berkshire. While the two may have been involved, they would probably not have taken on such a large holding by themselves.
The big purchases of Occidental stock late in the week are uncharacteristic of Berkshire, which normally accumulates stock in companies relatively quietly over time.
The huge buying of Occidental underscores Buffett’s enthusiasm for the company. Berkshire already owns $10 billion of 8% preferred stock and about 84 million warrants to purchase Occidental stock at $59.62 a share.
“Buffett and Combs and Weschler require a large margin of safety,” Bill Smead, manager of the Smead Value fund, wrote in an email to Barron’s. “They must have concluded that OXY has that safety around $46 to $55 per share, with oil above $90 per barrel.” The Smead fund holds Occidental stock.
Once Berkshire hit the 10% stake in Occidental on Tuesday, subsequent changes in its holdings had to be reported promptly.
Berkshire bought the Occidental preferred in 2019, when Occidental CEO Vicki Holub wanted to quickly arrange…
Read More: Warren Buffett’s Berkshire Hathaway Has $5 Billion Stake in Occidental Petroleum