Legendary investor Warren Buffett’s Berkshire Hathaway (BRK.A) (BRK.B) continues to ramp up its stake in energy company Occidental Petroleum (NYSE:OXY). Following the completion of the recent transaction, Berkshire’s stake in Occidental has increased to 29% from 28.5%.
According to the SEC filing, Berkshire bought over 2.95 million shares of Occidental at prices ranging from $59.59 to $59.77, for an aggregate value of $176 million. Based on the closing price of $60.20 per share on Monday, Berkshire now owns about 255.3 million OXY shares worth nearly $15.4 billion.
Buffett’s Love for Occidental
Buffett has purchased OXY stock in the last nine consecutive trading days, which reflects that its passion for the company seems to be only getting stronger. This month, he has bought about 7.27 million Occidental shares worth $434.8 million.
In addition to this, Berkshire owns $8.5 billion of Occidental preferred shares with an 8% dividend and warrants to buy 84 million shares of the company at $59.62 per piece.
Interestingly, Buffett sees potential in OXY’s carbon capture technology, under which the company aims to capture carbon dioxide directly from the air and store it underground. Additionally, both Berkshire Hathaway and OXY entered into a joint venture earlier this month. Under the deal, Occidental will use its technology to extract lithium compounds at Berkshire’s geothermal facility in California. This strategic partnership could unlock new opportunities for both companies.
Is OXY a Buy or Sell Now?
The company’s strong presence in the Permian Basin and efforts to improve storage and pipeline capacity for transporting oil and gas are encouraging. However, Wall Street analysts remain sidelined on OXY stock. The analysts are concerned about the company’s investments in lower-carbon ventures, which they view as potentially less profitable compared to focusing on traditional oil and gas assets.
OXY stock has a Hold consensus rating based on two Buys and 12 Holds. The analysts’ average price target on Occidental stock of $72 implies 19.6% upside potential from current levels. In the past six months, OXY shares have gained 2.8%.
