Berkshire Hathaway boosts Occidental Petroleum stake by $5.2M

Warren Buffett's Berkshire Hathaway (BRK-A, BRK-B) purchased $5.2 million more shares of Occidental Petroleum (OXY), boosting its stake to around 28% in the oil & gas producer. The increased investment follows Occidental's recent agreement to acquire Permian Basin driller CrownRock for $12 billion.

Yahoo Finance's Seana Smith and Bradley Smith break down the details of this trending ticker.

Video Transcript

SEANA SMITH: Another stock that we're watching is Occidental Petroleum and Warren Buffett's Berkshire Hathaway, upping its stake in the energy giant. Now according to a forum for filing with the SEC, Berkshire Hathaway purchased another $5.2 million worth of shares of Occi, bringing its total ownership to more than 243 million shares, that equates to about a 28% stake in the company. You're taking a look at a five-day chart. But if you take a look at a longer term chart, year-to-date chart, one-year chart of Occidental Petroleum, it hasn't done too much.

You can see shares off just about 2%. So you might be asking yourself, why then is Warren Buffett doubling down on a name like this. Well, we know some of the pressure, he often sees a buying opportunity when stock prices do pull back.

Also, we have to bring attention the shift that's happening right now within the energy space, something that we have been talking about time and time again, this revival of onshore drilling, the US's role in the global energy market. And we know that Occidental recently agreeing to buy Crown Rock earlier this month for just about $12 billion, giving them a larger exposure here to the Permian Basin. So, clearly, they see it as a big driving opportunity, a future driving opportunity for returns down the line. Buffett-- Berkshire Hathaway, at least, seems to like what they see, so once, again, adding to their position within the name.

BRAD SMITH: Yeah, you take a look at the stock chart that we were just looking at a moment ago here. And, ultimately, they were able to make this purchase just shy of where shares are sitting right now. The average price that they paid for the orders that they were able to place and submit here that, you know, I won't even go into the totals of how many shares they purchased, but the average price comes out at about 60 bucks, so just a little bit shy of where we're seeing shares trade here on the day. And so, ultimately, catching a little bit of a deal, but, also, kind of moving markets with that as they have the propensity to do when you've got that type of money to throw around.