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overview of OXY company Fast Facts_ Oxy Overview
- 05/13/2022 – good to know Buffett keeps buying OXY and
Occidental Petroleum surges as Buffett keeps adding to stake, topping 15%
Occidental Petroleum (NYSE:OXY) +7.6% in Friday’s trading after Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) bought more than 901K shares in two purchases this week valued at a combined $52M.
Berkshire (BRK.A) (BRK.B) bought 716,355 shares at $57.32 each on Tuesday, and 185,419 shares at $57.34 each on Thursday, lifting its ownership in OXY to more than 143M shares, 15.3% of the company, worth ~$8.5B.
The additional purchases may fuel speculation that Berkshire (BRK.A) (BRK.B) will add further to its stake and reach 20%, or even bid for the entire company.
Energy stocks are scoring broad gains in Friday’s trading as crude oil prices rebound, up ~3.5% over $110/bbl.
Earlier this week, Occidental (OXY) reported better than expected Q1 adjusted EPS of $2.12, swinging from a $0.15/share loss in the year-earlier quarter.
- 04/29/2022 – the reasons Buffett buying OXY – great CEO, understands Permian, deleveraging debt, share buyback, dividend, rise of oil price
On March 7, CNBC’s Becky Quick reported on “Squawk Box” that Buffett told her, “We started buying on Monday [Feb. 28] and we bought all we could.” Since then, Berkshire has added 45 million more shares to the 91 million shares purchased during the first week of buying.
Here’s what convinced Warren Buffett to pile into this oil company
Buffett first dipped his toes in OXY in 2019, when he bought $10 billion in preferred shares — paying a fat, 8% dividend — along with warrants to buy 84 million shares. Buffett maintains the position to this day, but stayed away from its common stock for years. That is, until he read the earnings transcript from the Occidental’s February 25 earnings call.
“W]e know exactly what hit [Buffett] like a ton of bricks,” Bill Smead, chief investment officer at Smead Capital Management, said at a recent Yahoo Finance Plus webinar.
It was CEO Vicki Hollub, who thoroughly impressed Buffett, leading the Oracle of Omaha to later say in an interview she was “running the company the right way.”
Buffett promptly went on a buying spree, scooping up 136.4 million shares worth $7.7 billion — 14.6% of the company. (The position is Berkshire’s eighth largest.) Thanks to surging oil prices, Occidental is generating piles of cash — $2.9 billion of free cash flow in the last quarter, noted Smead.
“[A]at the time that [Buffett] started buying [Occidental stock], maybe they had a market cap of what — maybe $40 to $45 billion — where annually, it means they’re generating 25% of their market cap at that time [in] free cash flow,” he said.
Occidental is returning much of that capital to its shareholders in the form of buybacks and dividends — quite the turnaround from its 2020 low when it had plunged 93% from its 2011 record high of $117.89.
Flush with cash, OXY is also paying down its sizable debt load — much of which was raised to finance its $55 billion purchase of Anadarko Petroleum in 2019. The company reported long-term debt of $29.4 billion as of year-end 2021. But this elevated liabilities load may have been a selling point, as being “short” bonds has been one of the best trades of 2022.
“If anybody likes to think about the hedge fund world, the perfect trade on January 1 of this year was to be short long-term bonds,” Smead said. “And what was OXY on January 1? Short bonds that they’d sold to buy Anadarko long oil.”
Smead then divined the Oracle’s thought process as he was reading that Occidental earnings transcript in February. “Buffett is looking at this and going — wait a second — a company that used to not have great returns on equity is about to go through great returns on equity in a way that he never could have envisioned.”
Smead also sees the potential for Berkshire to fully acquire Occidental — which at its current market capitalization of $52 billion — would be Buffett’s largest purchase ever.
“I’d say there’s maybe a one in four or one in three chance,” Smead said, “which is a very good chance.”
- 03/31/2022 – Buffett owns 15% of OXY, also, CEO of OXY Hollub paid $798K on March 28 for 14,191 OXY shares at an average price of $56.24, raising her holdings to 467,282 shares and an additional 23,390 shares through a savings plan. Good perspective of OXY
Occidental Petroleum CEO Hollub follows Buffett with 14K-share purchase
Occidental Petroleum (OXY +2.4%) CEO Vicki Hollub just bought a chunk of the company’s shares on the open market, even as shares trade near three-year highs.
According to an SEC filing, Hollub paid $798K on March 28 for 14,191 OXY shares at an average price of $56.24, raising her holdings to 467,282 shares and an additional 23,390 shares through a savings plan.
Hollub last bought OXY shares on the open market nearly three years ago, when she paid $1.8M for 37,460 shares at an average $48.15/share on June 10, 2019.
Occidental Petroleum is Q1’s best performer in the S&P 500, with shares roughly doubling; Raymond James analyst John Freeman this week raised his OXY price target to $85 from $60, setting a new Wall Street high.
The CEO’s move follows the high-profile investment earlier this month by Warren Buffett’s Berkshire Hathaway, which now owns a nearly 15% stake of Occidental’s shares outstanding.
- 12/05/2020 – good article from SA on OXY
