Buffett oil investments

Image source: The Motley Fool. B is concerned, though the holding company is Sirius’ second-largest shareholder with a 3. Nebraska Furniture Mart has been a Berkshire Hathaway subsidiary since RH is growing at a nice clip, too. Refreshingly, Buffett has discussed his ardor for Apple on numerous occasions. Buffett added to the stake in the ensuing years before souring on IBM in

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This is the largest investment Berkshire Hathaway has made in some time. However, this isn’t just a common stock investment, so here’s a rundown of what investors need to know. The investment is contingent on the completion of Occidental’s proposed acquisition of Anadarko. Anadarko is buffett oil investments considering Occidental’s offer while its agreement with Chevron is in place. In many ways, this investment is right up Berkshire’s alley.

Berkshire Hathaway is putting some of its cash hoard to work in the oil industry.

But «oil prices will determine whether almost any oil stock is a good investment over time. Asked why Berkshire wouldn’t just buy Anadarko itself, Buffett said, «That might have happened if Anadarko came to us, but we wouldn’t jump into some other deal that we heard about from somebody else coming to us seeking financing. Later in the interview, longtime investing partner and vice chairman Charlie Munger responded to the question as well, saying, «Nobody asked us to. The Oracle of Omaha appeared on «Squawk Box» for a wide-ranging interview on Monday, following the weekend festivities at Berkshire Hathaway ‘s annual shareholder meeting. Sign up for free newsletters and get more CNBC delivered to your inbox. Get this delivered to your inbox, and more info about our products and services.

Some details on this investment offer

This is the largest investment Berkshire Hathaway has made in some time. However, this isn’t just a common stock investment, so here’s a rundown of what investors need to know.

The investment is contingent on the completion of Occidental’s proposed acquisition of Anadarko. Anadarko is still considering Occidental’s offer while its agreement with Chevron is in place. In many ways, this investment is right up Berkshire’s alley. The company has no shortage of energy-related investments, both in its stock portfolio and in its collection of wholly owned subsidiaries.

And the investment structure where Berkshire receives a combination of preferred stock and warrants isn’t anything new. What makes this investment rare is that Buffett seldom gets anywhere near bidding wars.

Just a couple years ago, Buffett immediately walked away from a major utility acquisition when he was outbid. Warren Buffett has used the preferred stock and warrant structure in making deals. The deal turned out to be one of Buffett’s most successful investments of all time.

While I’m not saying that Occidental’s stock price is going to quadruple in the next few years, the point is that Buffett is a master dealmaker. Just as in the case of Bank of America, even if the common stock doesn’t go anywhere, Buffett locked in a nice income stream no matter what, and some serious upside potential if things go.

To be clear, this investment isn’t finalized. Occidental’s acquisition of Anadarko is far from a sure thing, and if it doesn’t go through, this investment opportunity will almost certainly disappear. Even buffett oil investments, Berkshire Hathaway shareholders should interpret this as good news. The company managed to find a place to invest a significant amount of money at a strong guaranteed return, with potential for even more upside in the future. Apr 30, at PM.

Matt specializes in writing about bank stocks, REITs, and personal finance, but he loves any investment at the right price. Follow him on Twitter to keep buffett oil investments with his latest work! Image source: The Motley Fool. Stock Advisor launched in February of Join Stock Advisor. Related Articles.

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Some details on this investment offer

Read More. Holdings data is as of Sept. To be clear, this investment isn’t finalized. The stake does fit broadly with Buffett’s worldview. Although lower costs of extracting oil have made the sector much more attractive for new entrants, the resulting new supply shock has also caused all kinds of volatility in oil prices. Crude prices have stabilized in recent years, however, and perhaps that’s what lured the Oracle of Omaha back into the sector. While I’m not saying that Occidental’s stock price is going to quadruple in the next few years, the point is that Buffett is a master dealmaker. The nation’s fourth-largest bank by assets is also the oill position in Buffett oil investments equity portfolio, accounting for 9. Toggle navigation Menu Subscribers Log In. One of those regions is the Permian Basin, which was the major attraction in the Anadarko deal since it now produces more oil per day than the United Arab Emirates. This company had properties in the U. Buffett has been unloading Phillips in giant chunks for almost two years. This is the largest investment Berkshire Hathaway has made in some time. As Kiplinger has noted, it’s possible that every Berkshire investment in companies somehow tied to Malone’s truly Byzantine corporate structure could very well be the responsibility of one of Buffett’s portfolio investmennts. Action: Reduced stake Shares held: , That was because of their healthy balance sheets and their diversification into more than just crude oil drilling gasoline and other derivatives, refining, retailing, chemicals. A bet on bffett and housing-related industries is a bet on America, and Buffett is always bullish on the USA as a long-term holding.