Warren Buffett is recognized as one of the greatest investors of our time. Since becoming chairman of Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) in the mid-1960s, he has trounced the market, generating cumulative returns of more than 4.3 million percent versus 31,000% for the S&P 500. It’s how he earned his nickname, the Oracle of Omaha.
24/7 Wall St. Key Points:
- Warren Buffett is one of the greatest investors of the past century, which makes investors keep close tabs on the stocks he buys and sells.
- While investors mostly get a stale view of Buffett’s transactions through Berkshire Hathaway‘s (BRK-A)(BRK-B) 13-F filings, they got a rare, real-time glimpse in his purchases with a Form 4 filing.
- The filing showed Buffett bought just one stock five separate times over the past week.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
It is also why investors flock by the tens of thousands to Omaha every year for the Berkshire Hathaway annual shareholder meeting and follow his every purchase and sale of stock.
Like all money money managers are required to do, Buffett gives us a glimpse into his trades every three months when he files his 13-F with the Securities & Exchange Commission and we get to see the moves he made over the previous quarter. Of course, that means the trades could be as old as 90 days old, but the filing still has the power to generate headlines and cause stock prices to move.
This is why Buffett and certain other billionaire investors are given special leeway to keep some transactions secret. For example, a year ago Buffett received permission to not publicly disclose his accumulation of stock in Chubb (NYSE:CB). He finally revealed in this year’s first quarter 13-F filing that he had bought 26 million shares of the insurer.
But being able to keep his purchase of Chubb a secret allowed him to buy shares without the market piling in and driving up the price. As evidence, as soon as the purchase was revealed, CB stock jumped 8% in after hours trading.
Last week, though, investors got a special treat. They got to witness almost in real time Buffett’s stock purchases and they showed was he was buying just one stock and he bought it five different times over three days.
Going to the well five different times
Although billionaire investors typically don’t have to update their trades right away, when they own more than 10% of a stock, they are considered an insider. That means when they make purchases or sales of the company they have to file a Form 4 with the SEC. And that’s where we got our insight into Buffett’s trades.
He filed a Form 4 for Occidental Petroleum (NYSE:OXY) last Friday because he owns over 28% over the oil and gas company. He also has permission to buy up to 50% of its stock and his latest filing shows he was scooping up more shares last week. Buffett bought almost 2.5 million shares on Tuesday, made two purchases totaling 2.8 million shares on Wednesday, and bought twice more on Thursday, buying another 3.6 million shares.
That’s 8.9 million shares giving him a total of 264.2 million shares valued at $12.45 billion. It makes the oil and gas stock the sixth largest holding in Berkshire Hathaway’s portfolio.
The average price he paid for OXY stock over those five tranches was between $45.50 per share and $46.92 per share.
That’s significant, because that is the lowest price it has traded at since 2022, just when Buffett began buying Occidental shares in earnest.
A long-term bet on growth
While Buffett has made multiple purchases since then, giving him an average purchase price of around $54 per share, over the past year, OXY is down nearly 22%. That makes this stock a unique opportunity to buy a company Buffett owns at a price less than what he paid. But does the Oracle’s rapid-fire purchase of more stock mean you should buy too?
As I wrote just last week, Occidental Petroleum is sensitive to fluctuations in oil prices, mostly to West Texas Intermediate (WTI) crude, but also Brent crude. Over the past year, WTI is down 5.5% while Brent is down 7.4%. Both, though, are down sharply from the highs hit last April, or 20%, respectively.
Yet President-elect Donald Trump has promised to enact policies that encourage greater domestic oil and gas production. Occidental is the largest independent producer in the Permian Basin, one of the most critical fossil fuel production regions in the U.S. However, global demand for oil is expected to weaken and most Permian output is sold to foreign markets. As oil is cyclical, OXY could experience some additional weakness for sometime.
Still, as a premier producer that has been shoring up its financials for the past few years, Occidental Petroleum looks like a good, long-term stock to own that is trading at a discount.
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