Warren Buffett is no longer the CEO of Berkshire Hathaway (BRKA +2.24%)(BRKB +2.33%). But his fingerprints are all over how the conglomerate does business. After all, Berkshire’s investment activities are now overseen by a handful of handpicked lieutenants, all of whom spent years working directly with Buffett, mastering his investment style while bringing their own strengths.
There are plenty of stocks in Berkshire’s portfolio that Buffett personally selected. One of Berkshire’s biggest positions, in fact, was a favorite of Buffett’s when he was at the helm. This under-the-radar oil stock remains relatively cheap despite Berkshire’s heavy interest.
Warren Buffett loved this oil and gas stock
Buffett first bought shares of Occidental Petroleum (OXY -0.87%) for Berkshire’s portfolio in the first quarter of 2019. He massively upped the stake in the fourth quarter of that year, only to sell the entire stake in the second quarter of 2020.
Buffett couldn’t stay away for long, however. In March 2022, he purchased massive blocks of Occidental Petroleum over several trading sessions. He purchased even more shares on several occasions in May and June. While he did trim the position slightly later that year, Berkshire has been a consistent buyer of Occidental Petroleum stock nearly every quarter since.
Image source: The Motley Fool.
What did Buffett love so much about Occidental Petroleum? Mainly, he adored the way the company was run. After reading the company’s annual report, Buffett commented, “I read every word and said this is exactly what I would be doing.” But Buffett was more than just bullish on Occidental Petroleum’s management style. He was also a long-term oil bull. He once warned:
When you buy into a huge oil production company, how it works out is going to depend on the price of oil to a great extent. It’s not going to be your geological home runs or super mistakes or anything like that. It is an investment that depends on the price of oil.
In a nutshell, Buffett thought that buying into an oil company nearly required a bullish stance on oil prices.
Fortunately, Buffett had revealed in 2011 where he thought oil prices were headed long-term. “You’ve stuck a lot of straws into the Earth, and it is a finite number,” he said. “So, the one thing I can almost promise you is that oil will sell for a lot more someday.”
Today’s Change
(-0.87%) $-0.48
Current Price
$54.45
Key Data Points
Market Cap
Day’s Range
$54.43 – $55.42
52wk Range
$38.80 – $67.45
Volume
1.6M
Avg Vol
10.7M
Gross Margin
32.14%
Dividend Yield
1.82%
Occidental Petroleum isn’t the same company that Buffett originally purchased in 2019. In 2024, Occidental Petroleum added to its debt load with a $12 billion takeover of CrownRock, L.P., a mid-tier U.S. oil and gas producer. Then, in 2025, it sold its OxyChem chemicals division directly to Berkshire Hathaway in a $9.7 billion cash deal. The company also welcomed a new CEO on June 1.
Still, Berkshire Hathaway has held onto its entire position, refusing to trim its stake even after Buffett’s departure. Trading at 17 times free cash flow, Occidental Petroleum stock isn’t as cheap as it was when Buffett first started buying. But a 6% free-cash-flow yield remains respectable in an otherwise expensive market, especially if you believe ongoing geopolitical uncertainties will keep oil prices higher for longer.