For 60 years, berkshire hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett held a clinic for Wall Street and regular investors.On the other hand, broad-based S&P500 Since the man affectionately known as the “Oracle of Omaha” became CEO in the mid-1960s, Buffett's total return, including dividends paid, has approached 34,000%. We are overseeing an amazing return of nearly 5 million % in total Class A shares ( BRK.A)!
Mr. Buffett is as fallible as any other investor, but he and his top investment aides, including Charlie Munger, the architect of Berkshire Hathaway until his recent death, were hidden behind the scenes. He has demonstrated a talent for finding hidden bargains. After decades of consistently outperforming the S&P 500, investors, both professional and casual, want to know what stocks Buffett and his team are buying and selling. , waiting on the proverbial edge of your seat.
Buffett has been shorting stocks lately, and a few stocks caught his eye.
Although Buffett has repeatedly said he would never bet on America, he and his team have been net sellers of stocks for five consecutive quarters. Overall, from September 1, 2022 to December 31, 2023, nearly $39 billion more stock was sold than purchased.
Despite being a net seller of stocks, several stocks have recently caught the attention of Oracle of Omaha. In particular, Berkshire's brightest investment minds are drawn to his two energy stocks: chevron (NYSE:CVX) and western oil (NYSE:OXY).
Since the start of 2022, Buffett and his team have purchased more than 248 million shares of Occidental Petroleum. Meanwhile, Berkshire's leading investors added about 15.85 million shares of Chevron stock in the quarter that ended in December, according to a Form 13F filing with the Securities and Exchange Commission. Together, these two oil and gas stocks account for his $37.2 billion of Berkshire's $368 billion investment portfolio.
The reason Mr. Buffett and his cohort put so much belief and capital into these two energy stocks is simple. That's because they believe spot oil prices can continue to rise above historical norms, or potentially even higher. Global crude oil supplies are currently constrained to some extent as the COVID-19 pandemic has forced most major energy companies to cut capital spending. Typically, when the supply of a product in demand becomes tight, the price of that product increases.
The appeal of Chevron, which holds a slightly larger market position by about $3 billion, is that it is an integrated operator. In addition to drilling for oil and natural gas, the company operates pipelines, chemical plants, and refineries, providing predictable operating cash flow in any economic climate or a hedge against falling spot prices for crude oil. We also provide.
Occidental Petroleum is also an integrated oil and gas company, but it relies on high-margin drilling operations for most of its revenue. Rising oil prices would provide a disproportionate benefit to Occidental.
Oracle of Omaha invested $74 billion in one hot stock in less than six years
Given that Buffett has increased his stake in Occidental to the equivalent of $17 billion in just over two years, you'd probably think he was talking about Chevron or some other tech stock. appleAccounting for nearly 42% of invested assets, Oracle of Omaha is the best stock to buy, but you'd be wrong.
Although Berkshire Hathaway is not listed on its 13th floor, Buffett has spent more than $74 billion buying stocks in popular stocks since mid-2018.
To put this into perspective, the benchmark S&P 500 is made up of 500 companies. As of the closing bell on April 10, 378 of these companies had market capitalizations of less than $74 billion. In theory, Warren Buffett and his top investment aides could acquire these 378 well-established companies within six years, with cash instead allocated to one special stock. there is a possibility.
What makes Warren Buffett's relentless buying of this beloved stock so remarkable is that it's his own company stock He's buying it!
Prior to July 2018, Berkshire Hathaway's stock repurchase program required shares to trade at less than 120% of book value before being repurchased. In the years leading up to that date, Berkshire's stock had never fallen below this threshold, meaning Buffett was unable to trigger a one-cent buyback.
However, on July 17, 2018, things changed dramatically. Berkshire Hathaway's board adjusted the terms and conditions governing the company's stock buyback program to allow Mr. Buffett and Mr. Munger to work their magic. The Board set out his two criteria:
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As long as Berkshire Hathaway has at least $30 billion in cash, cash equivalents, and U.S. Treasuries on its balance sheet.and
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Warren Buffett and Charlie Munger believe that their stocks are inherently cheap and that they can initiate buybacks without an end date or spending limit.
Mr. Buffett has repurchased Berkshire Hathaway stock for 22 consecutive quarters since the board revised these standards.
Berkshire Hathaway doesn't pay a dividend, so stock buybacks are the easiest way for the company to reward long-term investors. The number of outstanding shares has steadily decreased due to share buybacks, and investor ownership has gradually increased.
Additionally, companies with stable or increasing net income tend to see healthy earnings per share (EPS) growth through share buybacks. As of Dec. 31, Berkshire had nearly $168 billion in cash, cash equivalents, and U.S. Treasuries on its balance sheet, and the Oracle of Omaha continues to invest its capital in its favorite stock, Berkshire Hathaway. You can feel safe continuing to invest.
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Sean Williams has no position in any stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Chevron. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.
Warren Buffett could have bought any of the 378 companies in the S&P 500 for $74 billion.Instead, he piled it all into his one beloved stock was originally published by The Motley Fool
