Berkshire Hathaway (BRK-B), a major holder of
Occidental Petroleum (OXY), has added another 9,551,454 shares. The buy increased the company’s holdings of shares by 6.7 percent, and came to a total purchase price of just under $529 million.
Berkshire has been a regular buyer of shares at the company throughout the year. So as the company President and CEO this year. Insiders have been far more likely to be buyers rather than sellers.
Overall, company insiders own about 0.2 percent of shares. Berkshire now owns more than 10 percent of the company.
Shares of the oil giant have risen nearly 76 percent in the past year. That’s as revenue has risen 58 percent in the same timeframe as oil prices have rebounded.
Action to take: Investors may like shares here, as the company trades for about 9 times earnings. However, the stock only yields about 1 percent right now, a bit under the yields of other dividend-paying oil giants right now. But with ongoing buying from Berkshire Hathaway, shares are likely to continue to rally higher.
For traders, the longer-term uptrend in shares is likely to continue, even after a recent pullback in oil prices. The November $65 calls, last going for about $5.75, could deliver mid-to-high double-digit returns in the coming months before expiration.
Disclosure: The author of this article has a position in the companies mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.