Warren Buffett Is Ending 2024 With Even More of This Energy Stock. Should You Buy It Before 2025?

Core Insights - Warren Buffett's continued investment in Occidental Petroleum indicates confidence in the company's potential despite broader market challenges [1][12][17] Company Overview - Berkshire Hathaway has increased its stake in Occidental Petroleum to over 260 million shares, valued at over $12 billion, making it the conglomerate's sixth-largest stock holding [2] - Under CEO Vicki Hollub's leadership, Occidental is recognized for its operational expertise in fracking, which is considered a valuable skill in the current energy landscape [3][8] Industry Context - The oil and gas sector is not on the verge of obsolescence, as evidenced by the U.S. Energy Information Administration reporting that 60% of the country's electricity still comes from fossil fuels [9][14] - Goldman Sachs projects that global oil demand will continue to grow, potentially peaking at 110 million barrels per day by 2035, with OPEC not expecting "peak oil" until 2050 [15] Investment Rationale - Occidental is positioned to benefit from the anticipated growth in the carbon-capture industry, which is expected to grow at an annualized rate of 22% through 2033 [5] - The company's stock is currently priced 30% below its consensus price target of $61.48, suggesting potential for appreciation [6] Strategic Moves - Occidental is divesting non-core assets to focus on its primary business, enhancing its operational efficiency [8] - The majority of Occidental's projects are strategically located in the Permian Basin, providing access to essential infrastructure [13]