Is this Warren Buffetts new preferred stock
Over the years, the tech giant Apple (NASDAQ: AAPL) has been a dominant presence in the investment portfolio of the renowned investor Warren Buffett. However, recent developments have seen a shift in Buffett’s strategy, with the Oracle of Omaha selling a significant amount of AAPL stock, reducing its share in the portfolio from 50% to around 40% and missing out on potential gains of over $4 billion.
By mid-June 2024, another company seemed to be emerging as a prominent holding in Warren Buffett’s portfolio: Occidental Petroleum (NYSE: OXY). Warren Buffett now controls nearly 29% of OXY, displaying his confidence in the company’s future since 2022 when he first entered the volatile oil market.
Buffett’s interest in Occidental has been steadily increasing, culminating in a 9-day buying spree in June 2024, where he increased his stake to just under 29% with over 255 million shares. This surge in buying activity was partly driven by Occidental’s announcement of a partnership with Berkshire Hathaway (NYSE: BRK.A, BRK.B) focused on lithium mining, a mineral crucial for the production of lithium-ion batteries used in electric vehicles (EVs).
Despite Buffett’s support, OXY stock has not shown significant strength in the first half of 2024. While the year-to-date (YTD) chart shows a 2.01% increase, the stock has failed to maintain its higher price levels reached during a rally from mid-February to early April.
Currently trading at around $61.26, OXY is more than 11% below its yearly highs and has been trending downward. However, analysts remain optimistic about Occidental Petroleum’s future, with an average ‘buy’ rating and a 12-month price target of $72.59. Some predictions even suggest a climb to $90, with even the most bearish outlook placing the price above $63.
The positive forecasts, combined with Occidental’s lithium mining plans, likely explain Buffett’s recent buying spree in June. This shift in strategy reflects his confidence in the company’s long-term prospects and its potential for growth in the evolving market landscape.
