Warren Buffett’s Latest Portfolio: 5 Undervalued Stock Picks

4. Occidental Petroleum Corporation (NYSE:OXY)

Number of Hedge Fund Holders: 67

1-Year Forward P/E Ratio: 6.96x

Warren Buffett’s Berkshire Hathaway’s Holdings: $9,335,408,000

Percentage of Warren Buffett’s Berkshire Hathaway’s Portfolio: 3.11%

Occidental Petroleum Corporation (NYSE:OXY) is a Houston, Texas-based energy exploration and production company.

The company is transitioning toward the development of new technologies related to zero-carbon emissions. Occidental Petroleum Corporation’s (NYSE:OXY) construction of its first air capture plant in Ector Country, Texas, is going as per plan, according to Michael Sciallia at Stifel. The analyst gave Occidental Petroleum Corporation (NYSE:OXY) stock a ‘Buy’ rating on August 25. The plant will separate carbon dioxide (CO2) from the air and is expected to become operational in late 2024. Occidental Petroleum Corporation (NYSE:OXY) already has contracts for carbon removal credits with Shopify Inc. (NASDAQ:SHOP) and Thermo Fisher Scientific Inc. (NYSE:TMO).

Occidental Petroleum Corporation (NYSE:OXY) stock is trading at a modest forward P/E ratio of 6.96x. This represents a 10.3% discount compared to the energy sector’s forward P/E ratio of 7.76x.

Here’s what Smead Capital Management said about Occidental Petroleum Corporation (NYSE:OXY) in its Q2 2022 investor letter:

“For the quarter, our best-performing stocks were Continental Resources (CLR), Merck (MRK) and Occidental Petroleum Corporation (NYSE:OXY). Despite a steep sell-off in June in the oil and gas stocks, two of our oil stocks made the quarterly list.

If you are wondering how we are outperforming the S&P 500 Index in the first half of the year, look no further than our top three performers. Occidental Petroleum (OXY), Continental Resources (CLR) and Conoco Phillips (COP) soared in value and were barely represented in the S&P 500 Index. To quote Jerry Jones, owner of the Dallas Cowboys, “We are in the first quarter on higher energy prices!”