3 Stocks That Warren Buffett Can't Get Enough Of
One of the most widely-followed individuals in the financial world is the mega-popular Warren Buffett. Recognized as one of the most successful investors of all time, it’s easy to see why eyes are constantly fixated on him and why investors are always waiting on his next move.
Warren Buffett is a philanthropist and businessman. He’s the CEO of Berkshire Hathaway, a diversified holding company whose subsidiaries engage in insurance, freight rail transportation, energy generation and distribution, manufacturing, and many others.
Throughout his life, he’s reaped stellar returns in the market. Simply put, he’s been excellent in choosing stocks, and that’s what we’re here to look at today.
On Monday, it was revealed in a regulatory filing that Berkshire Hathaway had acquired an additional 795,000 shares of Occidental Petroleum Corp. OXY, which increased the company’s stake to 16.4%.
Buffett has been on a buying spree in 2022, something we typically do not see. However, it does raise a valid question – what else has he bought in 2022? Let’s take a deeper dive into his OXY purchase and two other of his 2022 purchases.
Occidental Petroleum Corporation
Founded in 1920, Occidental Petroleum Corporation OXY is an integrated oil and gas company with significant exploration and production exposure. The company is also a producer of various basic chemicals, petrochemicals, polymers, and specialty chemicals. OXY operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing.
OXY shares have been scorching hot year-to-date, as illustrated in the chart below.
Image Source: Zacks Investment Research
The company has reported strong quarterly results, exceeding EPS expectations consistently. Over its last four quarters, the company has beat bottom-line estimates on average by 7.6%, and in its latest quarterly release, OXY crushed EPS estimates by a sizable 26%.
Additionally, bottom-line growth rates are stellar across several timeframes. The $2.88 EPS estimate for the upcoming quarter reflects a jaw-dropping 800% growth in earnings from the year-ago quarter.
Perhaps even more impressive, FY22 earnings are forecasted to climb a massive triple-digit 306% year-over-year. Analysts have pushed their estimates higher across the board over the last 60 days.
Image Source: Zacks Investment Research
OXY is a Zacks Rank #3 with an overall VGM Score of an A.
Apple
We’re all familiar with Apple AAPL, the creator of the legendary iPhone, among many other widely-popular products. The company has completely shifted the mobile phone landscape over the last decade, and it’s been one of the best places for investors to park their cash.
AAPL shares have struggled year-to-date, declining approximately 21% in value and slightly underperforming the S&P 500.
Image Source: Zacks Investment Research
Numerous times, Buffett has stated that he’s attracted to Apple due to a simple fact – brand loyalty. Apple consumers have a strong tendency to trade in old Apple products for new ones, establishing a loyal customer base. Additionally, he believes that the company’s services and products are very beneficial and crucial to society.
AAPL has provided stellar quarterly results, exceeding bottom-line expectations in a whopping 19 out of its last 20 quarterly reports. The company has acquired a four-quarter trailing average EPS surprise of a double-digit 12%, and in its latest quarter, it exceeded EPS expectations by a robust 6.3% in the face of adverse business conditions.
Analysts have primarily dialed back their earnings estimates over the last 60 days, with the $1.14 per share estimate for the upcoming quarter reflecting a somewhat concerning 12% decrease in earnings from the year-ago quarter.
However, the $6.11 EPS estimate for FY22 displays a robust 9% growth in the bottom-line year-over-year.
Image Source: Zacks Investment Research
Apple is a Zacks Rank #3 (Hold) with an overall VGM Score of a C.
Chevron
Chevron CVX is one of the world's largest publicly traded oil and gas companies, with operations that span nearly all corners of the globe.
CVX shares have been hot year-to-date, increasing approximately 30% in value and extensively outperforming the S&P 500.
Image Source: Zacks Investment Research
Berkshire Hathaway significantly raised its stake in the oil giant, becoming one of the largest holds in the portfolio. Similar to OXY, it represents a massive bet on the oil industry, a primary focus of attention within the market throughout 2022.
CVX has had mixed quarterly results over its last four reports, missing EPS expectations twice and exceeding them twice. In its latest quarter, the company reported EPS of $3.36, which missed the Zacks Consensus Estimate of $3.44 per share by a slight 2.3%.
Analysts have dialed back their earnings estimates over the last 60 days, but bottom-line growth remains robust. For the upcoming quarter, the $4.69 per share estimate displays a substantial 175% growth in earnings from the year-ago quarter.
Furthermore, for the current fiscal year, the $17.50 EPS estimate reflects a massive triple-digit expansion of 115% within the bottom-line year-over-year.
Image Source: Zacks Investment Research
CVX is a Zacks Rank #3 (Hold) with an overall VGM Score of an A.
Bottom Line
Commonly referred to as the “Oracle of Omaha,” Warren Buffett has amassed a fortune within the stock market, making it easy to understand why investors anxiously await every move he makes.
He’s been on a buying spree year-to-date, which we generally don’t see. The Berkshire CEO undoubtedly recognizes all of the discounts that 2022 has brought us and has deployed an offensive approach.
All three stocks above are ones in which Buffett has increased his position size in throughout 2022, putting them in the spotlight. For investors seeking to invest like the Oracle of Omaha, all three companies above would provide that approach.
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