Billionaire Warren Buffett’s Berkshire Hathaway (BRK.A) (BRK.B) continued its obsession with oil and gas major Occidental Petroleum (NYSE: OXY) and bought another 4.3 million shares this week. OXY stock has gained 87.6% so far this year, purely on the heels of rising oil prices and Buffett’s fixation on the company.
According to the TipRanks Insider Trading tool, Berkshire Hathaway spent around $250 million on buying an additional 4,304,146 OXY shares. The stock was purchased between July 11 and July 13 through multiple transactions at prices ranging between $56.8462 and $59.8491.
The latest slew of purchases makes Berkshire a 19.2% owner of Occidental Petroleum. Should Buffett continue beefing up the stock and cross 20% ownership, Berkshire will be able to start incorporating Occidental’s proportionate earnings into its own results. For now, Berkshire only includes the dividends earned from its preferred share stake in Occidental.
In addition to the Insider Trading tool, a list of Daily Insider Transactions, Insiders’ Hot Stocks, and Top Corporate Insiders are available on TipRanks, which might interest investors.
Occidental 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.
Wall Street is Cautious About OXY
Recently, Goldman Sachs analyst Neil Mehta downgraded the OXY stock to a Hold rating from Buy with a price target of $70, which implies 20.7% upside potential to current levels.
According to Mehta, Occidental continues to hold an attractive free cash flow outlook, but he currently believes that rival ConocoPhillips (COP) holds more upside potential.
Similarly, despite Buffett’s voracious appetite for the stock, the Street remains cautiously optimistic about OXY, with a Moderate Buy consensus rating based on eight Buys, six Holds, and two Sells. The average Occidental Petroleum price target of $74.44 implies 28.3% upside potential to current levels.
Ending Thoughts
Berkshire Hathaway continues to beef up its OXY share purchase, which bodes very well for Occidental. The company is in a happy place right now, with oil prices remaining high and earnings expected to beat expectations.
