So far this month, Berkshire Hathaway (NYSE: BRK/B) has announced purchases of 27 million and 12 million shares of long-time EIA recommendation Occidental Petroleum (NYSE: OXY). As a result, the giant investment and insurance firm now owns 18.7 percent of the oil and gas producer—that’s nearly as much as the next two largest holders combined.
Why load up on a still highly leveraged commodity producer just as an inflation-focused Federal Reserve appears to be tipping the US economy into recession? We suspect it’s the same basic reason for all of Mr. Buffett’s investments since he became Berkshire’s Chairman and CEO way back in 1970: He sees truly massive free cash flows in Occidental’s future.
We couldn’t agree more about the company’s long-term promise, and the huge returns the stock is likely to generate for shareholders. And in fact, we’re equally confident about the future of all of our EIA recommendations. The near-term, however, is likely to be a time for patience and strategic positioning.
Your complete guide to energy investing, from growth stocks to high-yielders.
In October 2012, renowned energy expert Elliott Gue launched the Energy & Income Advisor, a twice-monthly investment advisory that's dedicated to unearthing the most profitable opportunities in the sector, from growth stocks to high-yielding utilities, royalty trusts and master limited partnerships.
Elliott and Roger on Jul. 27, 2022