Side with Warren Buffet, I Bought OXY| Slight Fundamental Analysis
Buffet increas his stake in $Occidental(OXY)$ in recent days, keep buying in 3 days at price around $53 to $55 per share.
On Wednesday, local time, according to Buffett's Berkshire Hathaway's latest filing with the U.S. Securities and Exchange Commission (SEC), the company added oil stocks for three consecutive days from March 14 to March 16. , spent a total of $985 million.
As of Thursday's close, Occidental's shares closed at $58.01 a share, rose 9.47% on the day.
This is the third time since March that Buffett has disclosed the addition of Occidental Oil to the outside world. Before that, Buffett had purchased for several consecutive days on March 2, 3, 4, 9, 8 and 11th.
Why Buffet long in OXY?
Before Buffet adding stock position of OXY. When OXY spent $38 billion to buy Anadarko Petroleum in 2019, Buffett provided $10 billion in financing.
For this $10 billion investment, Buffett received:
(1) preferred shares,which the annual interest rate of these preferred shares is 8%;
(2) after 10 years the company has the right to buy back the preferred shares at a premium of 105%. That is, Buffett's loan doesn't have prepayment risk.
Seems like Buffet had a positive of this investment.
Seems that Buffett began to be optimistic about OXY a few years ago. Even before the recent surge in oil prices, even after a period of rich oil prices, Buffett's $10 billion investment did not lose much.
How Does OXY's fundamentals and potentials will be？
- Cash flow see positive
- Quartely EPS see big increase，same as the dividend.
- Institutional investors play the big roles.
A Possible MAY?
Many U.S. crude companies follow The Paris Agreement, which is a legally binding international treaty on climate.
Occidental will also put the climate proposal from investor group Follow This to a shareholder vote in May. Occidental aims to achieve net-zero emissions by 2050, but the plan has failed to meet the requirements of the Paris Agreement because it lacks commitments to reduce overall emissions in the medium term.
In response, Occidental spokesman Eric Moses said the company had established a "robust set of greenhouse gas targets to advance" its net-zero goal and had approved several initiatives including additional climate commitments.
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