The Oracle of Omaha continues his binge on one of his favorite oil and gas stocks, Occidental Petroleum (NYSE:OXY). A regulatory filing on July 7 disclosed that Warren Buffett’s Berkshire Hathaway (BRK.A) (BRK.B) splurged another $697.73 million on buying an additional 12,042,470 OXY shares.
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Berkshire bought OXY stock between July 5 and July 6 through multiple transactions at prices ranging between $57.2623 and $59.0455. Following this purchase, Berkshire, which is already a major shareholder, owns roughly 18.7% of Occidental Petroleum.
In addition to the Insider Trading tool, a list of Daily Insider Transactions, Insiders’ Hot Stocks, and Top Corporate Insiders are available on the TipRanks, which might interest investors.
Berkshire already owns preferred shares and stock warrants worth $10 billion, which it can use to buy another 83.9 million of OXY stock for $5 billion.
Occidental Petroleum has been one of the major beneficiaries of the war-induced record-high oil prices. It has consistently outperformed earnings expectations since 2021 and is scheduled to report its Q2FY22 results on August 2. The consensus earnings estimate is pegged at $2.92 per share.
Renowned blogger Paul Franke believes that Buffett’s OXY buying frenzy is like “playing with fire.” Franke believes that recession odds are nearing 100% and disputes the timing of Buffett’s investment in oil and gas companies.
Franke wrote, “I am still questioning the timing of his purchases and the likelihood fossil fuel prices have already peaked, as a U.S. recession appears to have begun. I believe rampant speculation by bulls that Berkshire may acquire 100% of the company is unlikely and does fit his past mode of operation with mega-cap investments.”
Wall Street Recommends Moderate Buy for OXY
Wall Street analysts are cautiously optimistic about OXY stock with a Moderate Buy consensus rating based on nine Buys, five Holds, and two Sells. The average Occidental Petroleum price target of $74.44 implies 22.7% upside potential to current levels. Meanwhile, the stock has almost doubled year-to-date on the Buffett buying bandwagon.
Insiders Are Bullish on Occidental
TipRanks’ Insider Trading Tool shows that Insider Signal is currently Positive on OXY stock, with corporate insiders buying $2.2 billion worth of Occidental shares in the last quarter.
Parting Thoughts
Buffett’s Berkshire Hathaway is slowly increasing its stake in Occidental Petroleum. Although many believe that Buffet may be up to some big surprise moves, for now, it bodes well for the oil company.
