Warren Buffett, the renowned CEO of Berkshire Hathaway (NYSE:BRKa), has been steadily increasing the company’s stakes in Occidental Petroleum (NYSE:OXY) and Apple (NASDAQ:AAPL) with the support of his investment team, including Ted Weschler and Todd Combs.
Notably, Berkshire Hathaway’s investment team has been actively acquiring Occidental Petroleum shares since 2022, accumulating a substantial holding of over 224 million shares. This investment underscores the company’s growing interest in the energy sector.
At the same time, Berkshire Hathaway has expanded its already significant $162 billion stake in Apple, one of the world’s leading technology companies. Despite Warren Buffett’s reputation as a non-tech-savvy investor, he appreciates Apple’s commitment to innovation and its transformation into a platform company under the leadership of CEO Tim Cook.
One key aspect of Apple’s strategy that aligns with Warren Buffett’s investment philosophy is its shift toward subscription services. This strategic move is expected to stabilize revenue during iPhone replacement cycles and enhance customer loyalty. As of the last twelve months, Apple reported revenue of $383.93 billion, underscoring its position as a major player in the technology industry.
Furthermore, Apple has maintained a robust return on assets of 28.23% in the third quarter of 2023. The company’s management has also been actively repurchasing shares and has consistently raised its dividend for 11 consecutive years, both of which are in line with Warren Buffett’s investment criteria.
Meanwhile, Occidental Petroleum, the integrated energy company in which Berkshire Hathaway has been increasing its stake, is known for its long-standing dividend payments. The company has a remarkable track record, having paid dividends for 50 consecutive years. Occidental Petroleum is expected to be profitable in the current year.
According to data from InvestingPro, Occidental Petroleum has a market capitalization of $57.66 billion and trades with a price-to-earnings (P/E) ratio of 10.12. The company’s stock generally exhibits low price volatility, making it a relatively stable investment.
In addition to these investments, it is highly likely that Warren Buffett and Charlie Munger, Berkshire Hathaway’s Vice Chairman, have been buying Berkshire Hathaway shares. The company’s share repurchase program, amended in 2018, allows for buybacks when shares are considered undervalued and when Berkshire Hathaway has at least $30 billion in cash and equivalents. As of June 30, Berkshire Hathaway’s cash reserves exceeded $147 billion, comfortably surpassing the buyback threshold.
Warren Buffett’s time-tested strategy of investing in well-established companies that pay dividends and are led by strong management teams has delivered remarkable returns for Berkshire Hathaway. It’s worth noting that since the 1960s, this approach has resulted in a return of over 4,250,000% in Berkshire Hathaway’s Class A shares.
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