Buffett’s Berkshire Hathaway pounces on energy stock

By Scoop
March 15, 2022 · less than 3 min read

The business big dog saw his multinational firm plough $1.5 billion into Occidental Petroleum, in just three days.

Riding the wave of energy stock

Oil prices are sky high. The Russia-Ukraine conflict is hitting supply, so naturally providers are upping their prices. Occidental Petroleum’s prices have risen 87% this year alone, attracting the attention of Wall Street’s heavyweights. In recent weeks, Warren Buffett’s Berkshire Hathaway has managed to acquire 13% of Occidental’s Common Stock, splashing $6 billion on the producer’s stocks in the last few days of trading.

But after throwing down an initial $4.5 billion, the big man wasn’t done. Now, with 118 million shares of Occidental in its pocket, Berkshire Hathaway is sitting pretty.

“Be greedy when others are fearful”

One of Buffett’s most famous lines, the sentiment clearly still holds true for the billionaire businessmen. With panic ensuing at the seemingly never-ending rise in oil prices – and now sanctions slapped on Russia limiting the supply of fuel – much of the world is in panic mode.

Buffett’s latest acquisitions go against Berkshire Hathaway’s normal tactics. While the firm has developed a reputation for buildings its stock portfolio over time, this latest move sees the heavyweight investor building his portfolio at the high tide of this industry’s supplier risk. So what’s the deal?

Just before Occidental’s takeover of Anadarko Petroleum in 2020, its stock tanked and has been treading water ever since. But the recent surge in prices has seen Occidental pay down its debts and strengthen its financials. Warren Buffett does nothing without a reason and the changing face of the petroleum industry has clearly caught his eye.

So is Buffett buying the dip? Whatever his reasoning, it seems this heavyweight jumped onboard at the perfect time.

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