- Warren Buffett's Berkshire Hathaway has built a nearly 20% stake in Occidental Petroleum this year.
- Buffett's company spent close to $10 billion on the stock over the course of 29 trading days.
- Berkshire purchased 75% of its total holding in just 11 trading days.
Warren Buffett's Berkshire Hathaway has plowed nearly $10 billion into Occidental Petroleum stock over the course of just 29 trading days this year, a Markets Insider analysis of SEC filings and Buffett's comments shows.
The famed investor's conglomerate has amassed 182 million Occidental shares so far, giving it a nearly 20% stake in the oil-and-gas company as of July 18. The price range stretched from under $48 a share to over $59, and the weighted average cost was around $53, or about 17% below Occidental's closing stock price of $63.55 on Wednesday.
Berkshire established its position by scooping up 30 million shares in two days, February 28 and March 1. It needed only nine more trading days to almost quintuple its stake to 136 million shares, or more than 14% of the energy explorer and producer. In other words, it built 75% of its stake over the course of 11 trading days.
The conglomerate essentially halted its buying between mid-March and mid-June as Occidental's stock price steadily climbed to over $70, but has now ramped it up again as the shares have retreated.
Occidental stock has still more than doubled this year, as Russia's ongoing invasion of Ukraine continues to disrupt the global energy market and light a fire under fuel prices.
Buffett cited Occidental CEO Vicki Hollub's bold plan for the energy company as the reason why he pounced on its stock in the spring. He also underscored the breakneck pace of Berkshire's initial Occidental purchases during his company's annual shareholders' meeting at the end of April.
"We bought in two weeks, or thereabouts, 14% of Occidental Petroleum," he said. "I find it just incredible."
The 91-year-old investor emphasized how absurd it would be to attempt to buy 14% of the nation's farms, apartments, auto dealerships, or anything else in just two weeks. Moreover, he noted that around 40% of Occidental's outstanding shares were held by index funds that weren't actively selling in the period, making Berkshire's rapid accumulation of shares even more extraordinary.
Buffett attributed Occidental's huge trading volumes to an unprecedented number of people treating the stock market like a casino, and shares of America's largest companies like poker chips.
"It defies anything that Charlie and I have seen, and we've seen a lot," he said, referring to his business partner and Berkshire's vice-chairman, Charlie Munger.
On top of the Occidental shares it bought this year, Berkshire holds warrants entitling it to buy another 83.9 million common shares at a fixed cost of $5 billion, and also possesses $10 billion of preferred stock.
If Buffett's company were to exercise its warrants and keep the resulting shares, it would command a roughly 26% stake in the company excluding its preferred stock, and have close to $25 billion invested in Occidental. On that basis, Berkshire would count the energy giant among the biggest bets in its stock portfolio.
