Buffett and Occidental (NYSE:OXY): A Never-Ending Love Story

Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) continues to load up shares of the oil company Occidental Petroleum (NYSE:OXY). As a result of the latest transaction between June 26 and June 28, Buffett’s conglomerate raised its stake to 25.1% from 24.9%.

In an SEC filing, Berkshire disclosed the purchase of 2,138,250 shares of Occidental in multiple transactions. These purchases were made at prices ranging from $57.01 to $57.17, for an aggregate price of $122.1 million. It is worth highlighting that the “Oracle of Omaha” now owns 224.1 million shares of Occidental, worth nearly $12.9 billion, based on Wednesday’s closing price.

As per the data collected by TipRanks, Berkshire has had a 60% success rate in its 83 transactions in the past three months, with an average return of 3.1% per transaction.

TipRanks offers daily insider transactions as well as a list of top corporate insiders. It also provides a list of hot stocks that boast either a Very Positive or Positive insider confidence signal.

Preferred Shares Redemption

The filing also states that Occidental redeemed 1,568 shares of the 8% preferred stock held by Berkshire, for about $172 million. Interestingly, OXY started redeeming the preferred shares in April of this year. Following these redemptions, Berkshire now owns Occidental’s 91,964 preferred shares, along with warrants to purchase common shares for $5 billion.

Is OXY a Buy or Sell Now?

Occidental’s strong presence in the Permian Basin and efforts to improve storage and pipeline capacity for transporting oil and gas are encouraging. However, lower oil prices remain a drag on its financials.

Wall Street analysts are cautiously optimistic about Occidental. It has a Moderate Buy consensus rating based on seven Buys and five Holds. The average OXY stock price target of $71.59 implies 22.9% upside potential.

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