Occidental Petroleum (NYSE:OXY) just had its best quarter ever in terms of returns. The oil and natural gas company doubled in the first quarter of 2022 as the price of oil increased to over $100 per barrel. This increase has largely been attributed to the ongoing Russia-Ukraine war. As a result, OXY stock was the the S&P 500’s best performer during Q1. Now, president and CEO Vicki Hollub is stepping in and buying shares.
CEO Vicki Hollub Buys OXY Stock
According to a Form 4 received by the U.S. Securities and Exchange Commission yesterday, Hollub purchased 14,191 shares of Occidental on March 28. The shares were purchased at an average price of $56.24, amounting to a total transaction cost of nearly $800,000. After the purchase, Hollub directly owns 467,282 shares of OXY stock that are worth around $27 million at current prices.
So, why is Hollub choosing to purchase shares now? As famed investor Peter Lynch once said, “Insiders might sell their shares for any number of reasons, but they buy them for only one: They think the price will rise.”
However, Hollub isn’t the only significant figure who has purchased shares this month.
Berkshire Hathaway’s (NYSE:BRK-A, NYSE:BRK-B) Warren Buffett has been on a buying spree this month. On March 1, Buffett disclosed a massive 113 million share position. However, Buffett wasn’t finished with his buying spree just yet. By March 16, Berkshire Hathaway reported a 136.4 million share position. The investment firm also holds warrants to buy 83.9 million shares at $59.62. These warrants were acquired from a transaction with Occidental in 2019. If the warrants were exercised, Berkshire would be sitting on a nearly 22% stake in the company. Without the warrants, Berkshire owns more than 13% of all shares outstanding. In addition, the firm is now the largest shareholder of Occidental.
In an interview, Buffett stated that he decided to purchase Occidental stock after reading the company’s earnings report transcript on Feb. 25. He explained that:
“I read every word, and said this is exactly what I would be doing. She’s [CEO Vicki Hollub] running the company the right way.”
Are Other Insiders Bullish on Occidental Petroleum?
In the past 12 months, insiders of Occidental Petroleum have purchased 106 million shares. On the other hand, insiders have sold 15 million shares during the same period. In total, insiders have amounted to a net activity of 91 million shares bought during the past year. That certainly seems to be a bullish signal for the oil company.
However, it should also be noted that Berkshire Hathaway was responsible for a large amount of the shares bought. Berkshire is now considered an insider of Occidental since it owns a greater-than-10% stake in the company. Therefore, none of the investment firm’s purchases were counted toward insider buying until it amassed a 10% position.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
