Occidental Trades fuel Berkshire buying speculation

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Amid a sell-off in the energy sector

Western Petroleum

Stocks have fallen to their lowest levels since late September

Berkshire Hathaway

made its recent purchases of the oil and gas company.

Occidental shares (ticker: OXY) fell 1.5% on Tuesday to 59.82 after falling 2.8% on Friday.

But trading volume in Occidental rose to 20 million shares on Friday, the highest for any session this year and above the 90-day moving average of 13 million shares.

That begs the question of whether Berkshire Hathaway (BRK/A, BRK/B) CEO Warren Buffett has been buying more Occidental lately.

Berkshire’s most recent purchases of Occidental came on Sept. 26-28, when the stock traded in a $58-$61 range. Berkshire owns 194.4 million shares for a 21% stake worth about $11.6 billion. The stock traded above $75 in November.

Buffett has been price-sensitive, paying for the bulk of the stake in the mid-to-late ’50s since Berkshire began disclosing its purchases in March. Investors should know by Wednesday if Berkshire bought more Occidental stock, as it has to disclose purchases as holders of more than 10% within two business days.

Berkshire had no immediate comment.

Buffett may address Occidental’s involvement and stock accumulation in his annual shareholder letter, due Saturday morning. Buffett is a fan of Vicki Hollub, CEO of Occidental.

Oil prices, now about $76 a barrel based on West Texas Intermediate crude, have been little changed since late September, but natural gas prices have fallen more than 60% to just over $2 per thousand cubic feet.

The fall in gas prices is dampening earnings prospects for Occidental, which is expected to earn less than $7 a share this year, up from nearly $10 in 2022. The company will report its fourth-quarter results on Feb. 28 .

Even with the estimates down, the stock is trading for less than 10 times forward 2023 earnings.

Write to Andrew Bary at andrew.bary@barrons.com