Shares of Occidental Petroleum (OXY) fell to $56.17, dipping below the $60 threshold that has historically prompted significant purchases by Warren Buffett’s Berkshire Hathaway (BRK.A). This price point has been informally referred to as “the Berkshire put,” as Buffett’s firm has routinely bought shares whenever the stock trades below this level.
Despite this trend, Occidental has remained below $60 for the entire month, marking the longest period since January when Berkshire made a notable purchase of 4.3 million shares. Analysts suggest that the lack of recent purchases may indicate Buffett’s decision to hold off on increasing his nearly 30% stake in the company. Berkshire’s investment in Occidental is valued at approximately $16.1 billion, and the firm has regulatory approval to acquire up to 50% of the company.
Occidental’s stock has experienced a 12.3% decline over the past year, contrasting with the relatively stable performance of the XLE fund, which tracks the broader energy sector. The recent drop in shares has been exacerbated by CrownRock LP’s announcement to sell 29.6 million shares acquired during Occidental’s $12 billion acquisition of the Midland, Texas oil producer.
In previous instances, Berkshire has capitalized on stock drops, such as in June when it acquired 2.56 million shares at prices just below $60. The firm also purchased nearly $590 million in shares following a price dip last December due to the CrownRock deal. Berkshire holds not only common shares but also warrants to purchase 83.5 million additional shares at $59.62 each, along with preferred stock in Occidental.