Why Warren Buffett is sticking with Occidental Petroleum?
As per the report, Buffett first invested in Occidental Petroleum back in early 2022, and he hasn’t slowed down since. The oil giant ranks as one of Berkshire Hathaway’s biggest holdings, reported The Motley Fool. But it hasn’t exactly been a star performer lately. Occidental’s stock has dropped by around 35% since late 2022 and is down nearly 20% in the past year alone.
According to The Motley Fool, a reason for buying Occidental stocks is that its valuation is appealing. With a price-to-earnings ratio of 13, it is lower than S&P 500 energy sector average forward earnings multiple of 14.7.
In addition, Occidental has generated over $3.7 billion in free cash flow in the past year, something Buffett has always appreciated in a company. He’s also a big fan of Occidental’s US oil and gas assets and its leadership in carbon capture, despite the technology still being in the experimental stage, as per the report.
SiriusXM: A struggling stock, but Warren Buffett’s faith remains
Buffett’s history with SiriusXM goes back to 2016, but his interest in the satellite radio company has increased only since last year, as per The Motley Fool. Despite the stock dropping over 40% in the past year and remaining below 60% of its peak in mid-2023. The company’s stock is trading at a bargain price, under nine times forward earnings, as per the report.SiriusXM also generated solid free cash flow, over $1 billion last year, as per the report. Buffet likes that it has a predictable business model; the subscription-based model provides steady and recurring revenue, reported The Motley Fool.
FAQs
Is SiriusXM a risky investment?
While SiriusXM’s stock is down, Buffett sees it as a long-term play due to its market dominance and solid cash generation, as per The Motley Fool.
Why does Buffett keep buying shares of Occidental Petroleum?
Buffett likes the stock because of its low valuation and strong cash flow. He also believes in its US oil and gas assets and carbon-capture potential, according to The Motley Fool.
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