Investing

Warren Buffett Is Buying Again, but There's a Big Catch This Time

Lee Jackson

Published: December 20, 2024 2:39 pm

Last Updated: December 24, 2024 7:01 am

Long-time investors and Warren Buffett mavens are familiar with his quote, “His favorite holding for an S&P 500 stock is forever.” So it is not surprising to report that for all of the success and stature Berkshire Hathaway has in the investment world, seven top companies make up almost 75% of the funds’ total holdings.

24/7 Wall St. Key Points:

• Warren Buffett is buying stocks for the first time since the summer.
• The Oracle of Omaha has been sitting on $325 billion in cash and short-term Treasury bills.
• Berkshire Hathaway is up 31% in 2024, outperforming the S&P 500.
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While much more concentrated than most portfolio managers would ever consider, the strategy has worked for Berkshire Hathaway investors for years and likely will in the future. So it was no surprise to us that when Buffett decided to buy stocks with some of the massive cash position he had raised, all he did was add to existing positions, including two that have traded down this year.

Here at 24/7 Wall St., we have speculated for much of the fourth quarter that Buffett feels that the stock market is way overbought and could be ready for a sizable correction after a two-year rally fueled by excitement over artificial intelligence. The S&P 500 is trading at a whopping 29.99 price-to-earnings ratio, compared with a historical median print of 15.5 times earnings.

It also should be noted that Buffett has avoided buying Berkshire Hathaway Inc. (NYSE: BRK-A) shares, as he did in the third quarter. Here are the purchases recently disclosed in a 13-F filing, which was prompted because Berkshire is a 10% holder of all the three stocks that were bought.

Occidental Petroleum

This stock recently hit a 52-week low and is down almost 25% year-to-date, likely spurring the purchase of nearly 9 million shares worth close to $405 million.

Over the past three years, Berkshire Hathaway has been buying the shares heavily. With the recent acquisition, the position now amounts to a massive $12 billion stake that, according to published reports, is close to a $1 billion loss.

Due to oil’s recent weakness, the stock pays a solid 1.94% dividend. Occidental Petroleum Inc. (NYSE: OXY) is engaged in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, Africa, and Latin America.

It operates through three segments:

• Oil and Gas
• Chemical
• Midstream and Marketing

The company’s Oil and Gas segment explores, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas.

Its Chemical segment manufactures and markets basic chemicals, including:

• Chlorine
• Caustic soda
• Chlorinated organics
• Potassium chemicals
• Ethylene dichloride
• Chlorinated isocyanurates
• Sodium silicates and calcium chloride
• Vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene

The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment also trades around its assets, including transportation and storage capacity, and invests in entities.

Sirius XM

Berkshire Hathaway added close to 5 million company shares for about $113 million and owns approximately a 35% stake worth $2.4 billion. The stock is sitting at a 52-week low and in loss territory. Sirius XM Holdings Inc. (NASDAQ: SIRI) operates as an American audio entertainment company.

It operates in two segments:

• Sirius XM
• Pandora and Off-platform

The company’s Sirius XM segment provides:

• Music, sports, entertainment, comedy, talk, news, traffic and weather channels, and other content, as well as podcast and infotainment services on a subscription fee basis
• Live, curated, and exclusive and on-demand programming services through satellite radio systems and streamed through applications for mobile and home devices, as well as other consumer electronic equipment.

This segment also distributes satellite radios through automakers and retailers, as well as its website; podcasts, including true crime, news, politics, music, comedy, sports, and entertainment; and offers location-based services through two-way wireless connectivity, including safety, security, convenience, maintenance and data, remote vehicles diagnostic, and stolen or parked vehicle locator services.

In addition, this segment provides music channels on the DISH Network satellite television service as a programming package; Travel Link, a suite of data services that include graphical weather, fuel prices, sports schedule and scores, and movie listings; graphic information related to road closings, traffic flow, and incident data for consumers with in-vehicle navigation systems; real-time weather services in vehicles, boats, and planes; and music programming and commercial-free music services for office, restaurants, and other business.

Its Pandora and Off-platform segment operates a music, comedy, and podcast streaming platform. The platform offers a personalized experience for listeners through computers, tablets, mobile devices, vehicle speakers, and connected devices and provides advertising services.

VeriSign

With this company, Berkshire was adding to a position that has had a very solid year. It was reported that 234,000 shares of the stock were bought for approximately $45 million. Berkshire owns 13% of the company and holds 13 million shares worth close to $2.5 billion.

This stock is not far from a 52-week high and looks ready to break out in 2025. VeriSign Inc. (NASDAQ: VRSN) and its subsidiaries provide domain name registry services and internet infrastructure, enabling internet navigation for various recognized domain names worldwide.

The company enables the security, stability, and resiliency of internet infrastructure and services, including providing root zone maintainer services, operating two of thirteen internet root servers, and offering registration services and authoritative resolution for the .com and .net domains, which support global e-commerce.

It also operates a directory for .name and .cc and back-end systems for .edu domain names.

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