There’s no doubt about it: Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) CEO Warren Buffett really likes Occidental Petroleum (NYSE:OXY) stock. In fact, Berkshire recently added millions of shares to its position. Not only that, but a Wall Street analyst also lifted his rating and price target on OXY stock.
This is a double shot of positive news for anyone invested in Occidental. First and foremost, Buffett is a kingmaker in the world of equities. If Berkshire is buying an asset, you can bet that plenty of the CEO’s followers will buy it, too.
Buffett already bet big on Occidental Petroleum last year with a stake of around 20% in the energy company. However, apparently the Oracle of Omaha wasn’t finished building his position just yet.
According to a CNBC report, Berkshire Hathaway bought an “additional 3.7 million Occidental shares for $216 million on Monday and last Thursday.” This increased the company’s stake in OXY to a whopping 23.5%.
What’s Happening With OXY Stock?
You can probably guess what happened to the Occidental Petroleum share price when traders learned about Buffett’s new purchase. It jumped, of course. Shares are now gaining around 3% this morning.
That’s not the only positive development concerning Occidental Petroleum, however. TD Cowen analyst David Deckelbaum also upgraded OXY stock from “market perform” to “outperform” and raised his price target from $63 to $70 per share.
These two news items are actually related. Along with his upgrade and price target raise, Deckelbaum cited “captive buying support” from Berkshire.
That isn’t the only reason the analyst likes Occidental, though. Deckelbaum also noted the company’s “superior risk-reward balance of superior exposure to crude pricing” as well as favorable “capital structure shifts.” Additionally, the analyst pointed out its “well productivity” and “favorable free cash yield.”
So, Occidental Petroleum has at least two notable fans: Deckelbaum and, best of all, Buffett. Don’t be surprised, then, if investors continue to load up on OXY stock this week.
On the date of publication, David Moadel 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.