Occidental Petroleum Corp.'s shares continued to surpass its peer group and the stock market after Warren Buffett s Berkshire Hathaway Inc. bought the company's shares, as well as its peer group and the broader stock market.
In the afternoon, the stock OXY increased by 0.1%, even as continuous crude-oil futures CL 00 fell 0.9%, the SPDR Energy Select Sector exchange-traded fund XLE shed 0.7% and the S&P 500 index SPX fell 2.6%.
In a Form 4 filing with the Securities and Exchange Commission, Occidental OXY showed that Berkshire Hathaway BRK.B, BRK.A, spent $352.07 million to buy 5,978, 190 common shares in a series of transactions from Sept. 26 to Sept. 28 at a weighted average price of $58.893, according to a MarketWatch analysis.
Berkshire Hathaway, which Buffett is chairman and chief executive officer, now owns about 194.35 million shares, or 20.9% of the 931.49 million shares outstanding as of June 30. That makes Berkshire the largest shareholder, with Dodge Cox next in line with a 10.6% stake, according to FactSet data.
All of Berkshire's purchases of Occidental shares came this year, as the company disclosed no ownership as of December 31.
Occidental's stock has gone up 112.1% year to date despite Buffett backing, while the energy ETF has advanced 29.9% and the S&P 500 has dropped 24.0%.
It is that outperformance, not the company's fundamentals, that keeps JPMorgan analyst John Royall neutral on the stock.
He said the company has shown solid execution through the COVID 19 downturn, has managed fairly stable production at minimal capital expenditure and has done well to lower its debt load.
We think OXY is executing well, and still has legs to the transformation of its capital structure, but the outperformance in shares, led by buying common shares from Berkshire Hathaway, keeps us on the sidelines, given a lack of clarity on Berkshire's intentions, Royall wrote in a note to clients.
Royall set a $61 price target on the stock, which was 0.8% less than current levels, along with his neutral rating.