Which stock has Warren Buffett bought more than any other in recent years? That's an easy question. The answer is clearly Berkshire Hathaway. The conglomerate has spent billions of dollars on stock buybacks initiated by Buffett.
But what if we eliminate Berkshire from contention? There's only one stock that Buffett has bought in 10 of the last 13 quarters.
Buffett has been a net seller of stocks for nine consecutive quarters. However, he went on a multi-year buying spree with one stock, big oil and gas producer Occidental Petroleum (OXY 0.39%).
The legendary investor briefly flirted with Occidental a few years ago, initiating a stake in the oil and gas company in the third quarter of 2019 only to exit the position in the second quarter of 2020. But he became serious about the oil stock in the first quarter of 2022, buying Occidental several times during the quarter.
Buffett then steadily added to Berkshire's stake in Occidental. Since Q1 of 2022, the only quarters he didn't buy more shares of Occidental were in the fourth quarter of 2022 and the third quarters of 2023 and 2024. Although Berkshire hasn't disclosed its holdings for the first quarter of 2025, we already know that it bought shares of Occidental thanks to a regulatory filing that revealed another purchase on Feb. 7, 2025.
Today, Berkshire owns over 264.9 million shares of Occidental Petroleum worth around $13 billion. That's enough to rank Occidental as the sixth-largest holding in Berkshire's portfolio.
We can only guess the reasons why Buffett likes some stocks. However, no guessing is needed with Occidental Petroleum.
Buffett said in an April 2023 interview with CNBC that he liked Occidental Petroleum's CEO, Vicki Hollub. He told CNBC's Becky Quick that Hollub "understands oil." He especially praised her focus on advancing carbon capture and storage technology.
Those sentiments were repeated in Buffett's annual letter to Berkshire Hathaway shareholders published in early 2024. Buffett wrote, "No one knows what oil prices will do over the next month, year, or decade. But Vicki [Hollub] does know how to separate oil from rock, and that's an uncommon talent, valuable to her shareholders and to her country." He also noted, "We particularly like [Occidental's] vast oil and gas holdings in the United States, as well as its leadership in carbon-capture initiatives."
Buffett expressed appreciation in the shareholder letter that the innovations enabling the extraction of oil from shale rock have made the U.S. largely energy-independent. Occidental's oil reserves have contributed to this achievement. However, he has acknowledged in the past that carbon emissions are concerning. That's why he has applauded Hollub's efforts to position Occidental as a leader in carbon capture and storage.
Berkshire will almost certainly hold onto its huge stake in Occidental Petroleum. Buffett included the stock among a handful that he plans to "maintain indefinitely." I suspect he will do more than just maintain Berkshire's position in Occidental at current levels, though. Buffett will likely continue buying more of the oil stock.
In 2022, Berkshire secured regulatory approval to acquire up to 50% of Occidental Petroleum. It currently owns 28.2% of Occidental. While Berkshire doesn't have to increase its stake to 50%, I suspect it will get closer to that level in the coming years.
Importantly, Berkshire owns warrants to buy shares of Occidental at a fixed price. Although we don't know what that price is, it's probably at a level that Buffett can purchase additional Occidental shares at a nice discount to its current share price. Since Buffett can't find many bargains in the market, this could make Occidental even more attractive to him.
But is Occidental a good pick for other investors? I think so. The stock trades at only 12.6 times forward earnings, well below the S&P 500 energy sector average of 14.75. If Hollub's carbon capture goals are achieved, the company could be positioned for significant long-term growth.
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