For almost six decades, Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett put on a show for Wall Street. Although he is as fallible as any other investor, the “Oracle of Omaha,” as he has come to be known, generated an overall return on his company’s Class A shares (BRK.A) of nearly 5,070,000% since he took over as CEO.
Due to Buffett’s supernatural outperformance relative to the benchmark S&P500, he designed everything that follows on Wall Street. Investors often eagerly await Berkshire results Form 13F filings and Quarterly Operating Results for more details on what the Oracle of Omaha and his team bought and sold during the last quarter.
Over the past six quarters, Warren Buffett and his top investment advisors, Ted Weschler and Todd Combs, have been decisive net sellers of stocks. More shares were sold than bought, amounting to $56 billion in 18 months.
But just because Berkshire Hathaway’s brightest minds were selective doesn’t mean they didn’t hit the buy button. The following are three magnificent stocks that Warren Buffett spent on a collective $96 billion purchase.
Western oil
The first hot stock the Berkshire boss can’t stop buying is an energy company Western oil (NYSE:OXY). Since the start of 2022, Buffett and his team have overseen the purchase of more than 248 million shares of Occidental at an estimated cost of just over $12.4 billion. Buffett and Co. added an additional 4.3 million shares of Occidental during the first quarter.
Macroeconomic factors are one reason why oil stocks are so attractive right now. During the COVID-19 pandemic, historic demand uncertainty has forced major energy companies around the world to significantly reduce their capital expenditures (capex). Although we are well past the worst of the pandemic and investment spending has returned to normal, global crude oil supply remains constrained. When the supply of a product in high demand is limited, it is not uncommon for the price of that product to rise.
Occidental Petroleum generates a disproportionate percentage of its revenue and cash flow from its drilling segment. If the crude spot price remains above its historical norm, it will benefit Occidental more than its peers.
Warren Buffett is probably also a supporter of Occidental Petroleum’s integrated operating structure. Although it is highly dependent on its drilling segment, it also operates chemical plants. If the spot price of crude oil falls, chemical plants can serve as a partial hedge to its cash flows.
But make no mistake, Occidental is not a typical Buffett investment. The Oracle of Omaha rarely takes significant stakes in companies weighed down by debt. Even after Occidental cut its net debt in half following the Anadarko acquisition, its net debt of $18.55 billion, as of March 31, 2024, still requires some caution and attention.
Chub
A second astonishing title that Warren…
