OXY buys resume as oil giant’s stock dips below $60

OXY buys resume as oil giant’s stock dips below $60

As foreshadowed in last week’s newsletter, Occidental Petroleum’s sub-$60 stock price did indeed prompt Berkshire Hathaway to resume its purchases of the oil giant’s shares after a four-month break.

The shares nearly touched $70 in April but have come back down along with the rest of the energy sector. 

On six consecutive market days starting a week ago Wednesday, Berkshire purchased a total of 4.3 million shares for $258.8 million. That’s an average of $59.98 per share.

(The filing covering the first three days was made late Friday last week. The purchases on Monday through Wednesday of this week are covered in a disclosure made public late Wednesday.)

As of Wednesday, Berkshire holds 252.3 million OXY shares, a stake of almost 29%. It remains OXY’s biggest shareholder, by far.

At today’s close of $59.84, the shares are valued at $15.1 billion, Berkshire’s sixth biggest equity position.

With OXY’s stock continuing to trade as low as $59.13 over the past two days, the buying may have continued.

Under SEC rules, Berkshire has three business days to disclose its purchases, so we won’t know until at least next Monday.

Even though Berkshire continues to build its position, Warren Buffett told shareholders at last year’s meeting, “We’re not going to buy control. We wouldn’t know what to do with it.”

Google to buy geothermal power from Berkshire utility in Nevada

Google says it has a “first-of-its kind clean energy partnership” with Berkshire Hathaway Energy subsidiary NV Energy in Nevada.

It will use geothermal electricity to help power its data centers as it moves towards its goal of using only carbon-free energy by 2030.

Under the arrangement, NV Energy will get 115 megawatts of electricity generated by a geothermal plant developed by a startup called Fervo Energy.

Google will agree to buy that power from NV Energy, a commitment that will facilitate the relatively expensive investment needed to produce geothermal energy on a larger, more economical scale.

Google Data Center Southland is seen from air in Council Bluffs, Iowa in 2019. REUTERS/Brian Snyder

Unlike solar and wind power, which are affected by the weather and the Earth’s rotation, geothermal taps into heat in the planet’s crust and is thus reliably available around the clock 

The arrangement needs to be approved by Nevada regulators.

Last week, Occidental Petroleum announced it will work with BHE on extracting lithium from geothermal brine, the liquid used to transfer heat from underground to a power plant.

BUFFETT AROUND THE INTERNET

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• Barron’s (subscription): Berkshire’s Big Stake in Liberty Sirius XM Has Been a Loser

• Financial Times (subscription): Shares of Warren Buffett-backed BYD jump after EU unveils lower than expected tariff

• Barron’s (subscription): Berkshire Hathaway Stock Gets No Lift From Surge in Apple Shares

• CNBC Make It: Warren Buffett thinks everyone should hear this advice for living a successful life without regrets

• CNBC Make It: Warren Buffett says this public speaking class changed his life—4 tips from the course

• Babson College: What Babson Students Learned from Warren Buffett in Omaha 

HIGHLIGHTS FROM THE ARCHIVE

The ‘simple arithmetic’ behind a Berkshire buyback (2019)

Warren Buffett lays out the conditions necessary before Berkshire will buy back any of its shares, drawing a distinction with almost every other company’s repurchasing strategy.

BERKSHIRE STOCK WATCH

Four weeks

Twelve months

BERKSHIRE’S TOP U.S. STOCK HOLDINGS – Jun. 14, 2024

Berkshire’s top holdings of disclosed publicly traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today’s closing prices.

Holdings are as of March 31, 2024 as reported in Berkshire Hathaway’s 13F filing on May 15, 2024, except for:

• Mitsubishi, which is as of June 12, 2023. Tokyo Stock Exchange prices are converted to U.S. dollars from Japanese yen.

• Occidental Petroleum, which is as of June 12, 2024

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 [email protected]?subject=Buffett newsletter feedback”>[email protected]. (Sorry, but we don’t forward questions or comments to Buffett himself.)

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