Warren Buffet's Potential Repeat Purchase of One Specific Stock in 2024's Final Quarter, According to His Historical Trends
It's no secret that Warren Buffett hasn't been finding many stocks that tickle his fancy lately. For eight consecutive quarters, the legendary investor has been a net seller, a streak that started back in late 2022. But denote that just because Buffett isn't buying stocks left and right, it doesn't mean he's entirely avoiding the market.
In fact, the "Oracle of Omaha" has been selective about the stocks he's purchasing, choosing only those that meet his stringent criteria. So, which stock did Buffett dive into in 2024 that he's most likely to buy again this quarter?
Buffett's 2024 buys
In the first quarter of 2024, Berkshire Hathaway's portfolio saw a notable addition – Chubb, a large property and casualty insurer. This happened to be the "mystery stock" that Berkshire started snatching up in 2023.
Buffett also added to three existing Berkshire positions in Q1 of that year. He continued to pile up shares of oil and gas producer Occidental Petroleum, and he also bought more shares of Liberty Media SiriusXM Class A and Liberty Media SiriusXM Class C, both tracking stocks for Liberty Media's interest in Sirius XM Holdings.
In the second quarter of 2024, Buffett went back for more of Chubb, Occidental, and the Liberty Media Sirius XM tracking stocks. He also initiated new positions in aerospace and electronics company Heico and cosmetics retailer Ulta Beauty. Buffett's investment managers bought more shares of Heico in the third quarter and padded Berkshire's stake in Sirius XM. They also started new positions in Domino's Pizza and swimming pool supplies distributor Pool Corporation.
We haven't received the full details of Buffett's Q4 2024 buys yet, but regulatory filings have hinted at purchases of additional shares of Occidental, Sirius XM, and Verisign.
A dicey pick
Two of Buffett's 2024 buys can be counted out as repeat candidates. Liberty SiriusXM Holdings merged with Sirius XM in September 2024, and Berkshire sold nearly all of its Ulta Beauty stake during Q3 of 2024. I'd be surprised if we saw Ulta as one of his picks this quarter.
But several other 2024 stocks acquired by Berkshire present solid possibilities for a repeat buy this quarter. Chubb fits perfectly with Berkshire's investment portfolio, and Buffett evidently values Sirius XM. Buffalo's second-in-command, Todd Combs, could even up the ante on Domino's Pizza, Heico, Pool, or Verisign.
If I had to guess, though, the stock Buffett bought in 2024 with the best chance of making an encore appearance this quarter would be Occidental Petroleum. Here's why:
- Buffett seems to be particularly smitten with Occidental. In his letter to Berkshire Hathaway shareholders last year, he singled out Oxy as one of a few stocks he expects to maintain indefinitely.
- Berkshire secured regulatory approval to purchase up to 50% of Occidental in 2022. Buffett currently has a 28.2% stake in the company, but just because he can buy more doesn't necessarily mean he will. However, I suspect we'll see further transactions in the future.
- Occidental shares are fairly priced, trading at 15.4 times forward earnings and currently sitting about 27% below its 52-week high.
Worth the investment for average joes?
I think Buffett is onto something with his steady build-up of a substantial Occidental position. While the demand for oil may dwindle as renewable energy sources become more popular, there's no denying that the need for oil and gas will persist. Occidental is also a frontrunner in carbon capture and storage technology, which presents a significant growth opportunity for the firm in the future.
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Despite Warren Buffett's reduced stock purchasing activity, he remained selective in his investments, with Chubb being one of his notable buys in 2024. Buffett also added to his positions in Occidental Petroleum, Liberty Media SiriusXM Class A, and Liberty Media SiriusXM Class C during that year.
In the second quarter of 2024, Buffett continued to invest in Chubb, Occidental, and the Liberty Media Sirius XM tracking stocks, and also initiated new positions in Heico and Ulta Beauty. His investment managers also bought more shares of Heico and Sirius XM in the third quarter.
Buffett's choice of Occidental Petroleum as one of his 2024 buys is noteworthy. He singled out Oxy in his shareholders' letter, expressed interest in buying up to 50% of the company, and saw the shares as fairly priced with potential for growth.
Given Buffett's continued interest in Occidental, it's a surprising pick that presents a solid possibility for a repeat buy this quarter. This could be particularly appealing for average investors looking to mimic Buffett's investment strategies.
