- Warren Buffett's Berkshire Hathaway bought another $52 million of Occidental Petroleum stock.
- The investor's conglomerate has invested about $7.5 billion in the energy company this year.
- Buffett was able to build a 14% stake in Occidental in about two weeks due to frenzied trading.
The famed investor's conglomerate bought about 902,000 shares, boosting its holding to 143 million shares, Securities and Exchange Commission filings show. That stake is worth $9.2 billion, based on Occidental's closing price of $64.08 on Friday.
Berkshire also holds around 84 million stock warrants with an exercise price of $59.62 — below Occidental's current stock price. If Berkshire were to exercise its warrants and retain the resulting stock, it would own 227 million Occidental shares, or about 23% of the company.
Berkshire piled $7 billion into Occidental stock between February 28 and March 16, then invested about $340 million more on May 5. The first outlay contributed to Berkshire deploying a net $41 billion on equities in the first quarter, marking one of the most active buying periods in its history.
Buffett pounced on Occidental after hearing CEO Vicki Hollub speak on an earnings call in late February. The executive highlighted the company's operational progress, debt repayments, dividend hikes, and focus on generating long-term, sustainable free cash flow.
"What Vicki Hollub was saying made nothing but sense," Buffett said during Berkshire's recent annual meeting. "I decided that it was a good place to put Berkshire's money."
Buffett also called out the rampant speculation and frenzied trading that enabled Berkshire to buy 14% of Occidental in about two weeks — even though 40% of the company's shares were held by asset managers and index funds that weren't selling at the time.
"The whole country in March of this year was sitting around trading Occidental in some crazy way that enabled us to buy a quarter of what wasn't owned by four other institutions that weren't going to sell," Buffett said.
"It defies anything that Charlie and I have seen, and we've seen a lot," he continued, referring to Berkshire's vice-chairman, Charlie Munger.
Buffett added that he'd never seen more Americans trading large US companies like "poker chips" and treating the stock market like a "gambling parlor."
Occidental stock has soared 106% this year, making it the best performer in the S&P 500 index. Investors are betting the company will benefit from surging energy prices, which are partly being fueled by supply disruptions due to Russia's invasion of Ukraine.
Read more: Insider interviewed the CEOs of See's Candies, Dairy Queen, Borsheims, and Brooks Running during Berkshire Hathaway's annual-meeting weekend. They provided a rare look inside Warren Buffett's company, and laid out how they're dealing with the pandemic and inflation.