Warren Buffett’s Latest Moves: A Glimpse into His Investment Strategy
Warren Buffett, the legendary investor, has been quite active in the market lately. Despite his concerns about the current market conditions, he has identified a few opportunities that align with his investment objectives. In the third quarter of 2024, Berkshire Hathaway sold $133 billion worth of stocks, but Buffett also made some strategic purchases, investing over $500 million in three companies.
Occidental Petroleum: A Value Play
One of Buffett’s recent investments is Occidental Petroleum (NYSE: OXY). He acquired 8.9 million more shares between December 17 and 19, paying around $409 million. This brings Berkshire’s total stake in Occidental to approximately 28.2%. The company’s strong position in the Permian Basin, the cheapest source of oil and natural gas in the United States, makes it an attractive investment. Despite facing challenges due to a mild winter and pipeline disruptions, Occidental’s third-quarter results were better than expected, and management expects significant cost savings starting in 2025. With an enterprise value-to-EBITDA ratio of just 5.6, Occidental shares appear to be a bargain.
Sirius XM: A Contrarian Bet
Buffett has also been accumulating shares of Sirius XM (NASDAQ: SIRI) since the third quarter of last year. Berkshire built its position by buying shares directly and through the Liberty Media tracking stock, which sold at a discount to become Sirius XM shares. The company’s 2025 outlook may have disappointed some shareholders, but Buffett sees an opportunity in its weakness. With a strong free cash flow conversion and a growing subscriber base, Sirius XM’s shares trade at an extremely low price of around 4 times analysts’ 2025 consensus earnings estimate.
Verisign: A Steady Growth Play
Buffett first acquired shares of Verisign (NASDAQ: VRSN) in 2012 and continued to build his position through mid-2014. He recently added $45 million worth of shares, bringing his total stake in the domain registry service provider to $2.6 billion. Verisign’s contract renewals for.com and.net domains through 2030 and mid-2029, respectively, provide a stable source of revenue growth. With a growing number of people and businesses building their own websites, Verisign should see small annual growth in registrations combined with regular increases in its registration fees. The stock trades at a fair price of about 23 times analysts’ consensus earnings estimate for 2025.
Investment Insights
Buffett’s latest moves offer valuable insights into his investment strategy. He is willing to take a contrarian approach, buying into weakness and identifying value in companies with strong fundamentals. His patience and discipline have allowed him to find opportunities in a market where many investors are struggling to find good value. As investors, we can learn from Buffett’s approach and focus on building a portfolio that aligns with our long-term objectives.
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