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Warren Buffett has been a net seller of stocks for seven consecutive quarters. He has also built Berkshire HathawayThe company's cash, cash equivalents and short-term investments rose to nearly $277 billion – the largest cash stockpile in the company's history.
Has the legendary stock market investor given up? Not quite. Buffett just bought shares in seven stocks. And I think one stands out as the best of the bunch.
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Buffett added to Berkshire's existing holdings in five stocks in the second quarter of 2024. I wasn't surprised. Occidental Petroleum (NYSE: OXY) One of those was Buffett, a big fan of Occidental and its CEO, Vicki Hollub. The stock is Berkshire’s sixth-largest holding.
Berkshire buys more than 1.1 million shares of chop (NYSE: CB) The second-quarter earnings surge wasn’t a shock either. Buffett began buying the insurance company last year without disclosing the identity of the stock. He has invested heavily in Chubb in recent quarters. It now ranks ninth in Berkshire’s portfolio.
Buffett's other three additions to existing positions in the second quarter share a common denominator. He increased Berkshire's stakes in Liberty Media Corp Series A (NASDAQ:LSXMA) and Liberty Media Corp Series C (NASDAQ: LSXMK)Buffett also bought another 96.2 million shares of Sirius XM Holdings (NASDAQ: Siri)That boosts Berkshire's stake in the satellite radio operator by more than 262%. Liberty Media owns more than 83% of Sirius XM's outstanding shares.
New positions
Ulta Beauty (NASDAQ: ULTA) It was Berkshire Hathaway’s largest new position in the second quarter. Buffett and his team bought more than 690,000 shares of the cosmetics retailer worth about $266 million at the end of the second quarter.
Ulta stock looks like a classic buy in a downturn. Ulta stock is down about 20% year to date, largely due to disappointing full-year guidance from the company. Ulta CEO Dave Kimble warned that consumer spending on beauty products was slowing.
Buffett also started a new position at Haiku (NYSE: HEI) In the second quarter, it bought more than 1 million shares of the aerospace and electronics company. Unlike Ulta Beauty, Heico has posted strong gains in 2024, with its shares up about 35%.
Heico’s business is booming. The company reported record revenue and earnings in its Q2 FY24 results announced in May. Acquisitions remain a key growth driver for Heico.
Best of the bunch
If you're an income investor, you might be drawn to Sirius XM's attractive dividend yield of 3.6%. Dividend payout ratio The ratio of 31.5% is also low, indicating financial flexibility that may enable it to increase earnings.
If you’re a value investor, Liberty Media stock may be a better fit for you. Both are trading at a forward earnings multiple of less than 6.3. Analysts polled by LSEG Group of Companies Liberty Media is also expected to deliver strong earnings growth over the next five years.
Still, I think Occidental Petroleum is the best overall stock among Buffett’s Q2 buys. The stock is attractively valued with a forward earnings multiple of about 14.5. It also offers a modest forward dividend yield of just over 1.5%. CEO Hollub is predicting an oil supply shortage by the end of next year, and if she’s right, the stock could soar in the not-too-distant future.
Buffett praised Occidental's pioneering work in developing carbon capture and storage technologyIf the company succeeds on this front, it could become a huge winner for investors for years to come.
Should you invest $1,000 in Occidental Petroleum now?
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Keith Spits The Motley Fool has positions in Berkshire Hathaway and Chubb. The Motley Fool has positions in and recommends Berkshire Hathaway and Ulta Beauty. The Motley Fool recommends Heico and Occidental Petroleum. The Motley Fool has Disclosure Policy.
Warren Buffett Just Bought 7 Stocks. Here Are The Best. Originally posted by The Motley Fool
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