Six straight days of buying as OXY dips below $60

FRI, MAY 19, 2023

WARREN BUFFETT WATCH

Six straight days of buying as OXY dips below $60

Warren Buffett told shareholders earlier this month that Berkshire Hathaway is "not going to buy control" of Occidental Petroleum but "we love the shares we have."

Berkshire now has even more shares to love and could be adding more.

According to two filings, the company bought another 5.6 million shares over six straight trading days: Thursday of last week through yesterday (Thursday) this week.

In total, it paid $201 million to add nearly 3.5 million shares, which is an average price of $58.26 per share.

Berkshire now owns more than 217 million shares with a market value of almost $12.9 billion. That's 24.4% of Occidental's outstanding shares.

Berkshire Hathaway's OXY holdings vs stock price

As has often been the case, the buying (indicated by the gray bands in the chart above), which has been sporadic since it began early last year, picked up again as OXY shares fell below $60 per share.

Today, OXY went as high as $60.23 and as low as $58.97 before closing at $59.13 for a 1.5% gain in the wake of Berkshire's disclosure of more purchases last night.

Since it owns more than 10% of Occidental and is thus considered an "insider," Berkshire is required by the SEC to tell investors when it makes changes in its holdings, but it has two business days to do so, so we won't know if the buying continued today until next Tuesday.

Berkshire has warrants that it received as part of its 2019 financing of Occidental's Anadarko Petroleum purchase to buy an additional 84 million shares for $59.62 each.

If they were all exercised now, Berkshire would have a stake of almost 34% in the oil giant.

Buffett, however, doesn't appear to be in any rush. At this month's meeting, he said, "[W]arrants last a long time, and I'm glad we have them."

One bank in, two banks out

Early in the week, Berkshire filed its Q1 13F form listing the publicly-traded U.S. stocks in its portfolio as of March 31.

It revealed a new 9.9 million share stake in Capital One Financial, which is currently valued at almost $972 million.

The four trading days after Berkshire filed its 13F late Monday afternoon account for 10 percentage points of COF's 13.4% rally for the week. The stock had dropped to the mid-$80's earlier this month as investors sold bank stocks following the high-profile failures of SVB, Signature, and, more recently, First Republic.

Capital One Financial: 1-week chart +13.42%

Buffett, however, is not all that enthusiastic about banks in general, as he made clear during the annual meeting when he said the industry has changed so much since the 2008 crisis that "we're very cautious ... about ownership of banks."

And during the first three months of the year, Berkshire completely eliminated its positions in two bank stocks that it had been reducing in recent quarters: Bank of New York Mellon and U.S. Bancorp.

Two closeouts

It also sold its remaining 8.3 million Taiwan Semiconductor shares after ditching 51.8 million shares in last year's fourth quarter, just months after establishing its 60 million shares position, then worth around $5 billion, during the third quarter.

During his CNBC interview in April and again at this month's annual meeting, Buffett indicated he changed his mind on owning the stock after he "reevaluated" the geopolitical risk posed by Beijing's claim that Taiwan is part of China.

Berkshire also closed out its relatively small $575 million position in RH, which Forbes notes is a "bad omen" for home furnishings.

That stock fell almost 9% the day after Berkshire's filing but rebounded to close today with a four-day loss of just over 1%.

Berkshire consolidates portfolio filings

For many years, Berkshire Hathaway has listed securities owned by its General Re subsidiary, which it purchased in 1998, in a 13F form filed by a Gen Re unit called New England Asset Management.

Our Berkshire Portfolio Tracker has been including these separately listed shares since early 2000.

On Monday, Berkshire announced that starting with that day's report, it would move those shares of Apple, Bank of America, Chevron, Citigroup, Diageo, HP, and Markel from the NEAM filing to the Berkshire filing.

So, what initially appeared to some to be increases for Berkshire's Apple and BofA stakes were actually just a rearrangement.

Here's a list of all the quarter's changes, taking that rearrangement into account.

The changes for Occidental and Chevron had been previously disclosed.

BUFFETT AROUND THE INTERNET

Some links may require a subscription

Wall Street Journal (subscription): Japanese Stocks Have Hit a 33-Year High. Warren Buffett Helped.

Forbes: Warren Buffett Won Big On Japan Gamble. Should He Double Down?

Bloomberg Opinion (subscription): What Warren Buffett Can Teach Billionaire Bankers and Depositors

Zacks on Yahoo Finance: Berkshire Hathaway's Q1 Portfolio Moves: Is Boring Okay?

Reuters: [Berkshire]-backed Nubank has AI investments as 'great priority', CEO says

Barron's (subscription): Berkshire Stock Buys Still Get a Buffett Bounce—but Maybe Not the Expected Results

HIGHLIGHTS FROM THE ARCHIVE

Fretting is 'the enemy of long-term performance' (2003)

Warren Buffett and Charlie Munger talk about why they focus on company results rather than worrying about stock prices.

BERKSHIRE STOCK WATCH

BERKSHIRE'S TOP U.S. STOCK HOLDINGS - May 19, 2023

Berkshire's top holdings of disclosed publicly-traded U.S. stocks, and BYD, by market value, based on today's closing prices.

Holdings are as of March 31, 2023 as reported in Berkshire Hathaway's 13F filing on May 15, 2023, except for:

BYD, which is as of a Hong Kong filing on March 31, 2023
Occidental Petroleum, which is as of May 18, 2023

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

QUESTIONS OR COMMENTS

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.)

If you aren't already subscribed to this newsletter, you can sign up here.

Also, Buffett's annual letters to shareholders are highly-recommended reading. There are collected here on Berkshire's website.

-- Alex Crippen, Editor, Warren Buffett Watch