Warren Buffett, the legendary investor and CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), has kept a cautious eye on the stock market in 2024. Despite selling $133 billion worth of stock through the first three quarters of the year, Buffett made a few strategic investments, totaling $5.8 billion. Among these, $562 million was allocated to three companies he believes hold strong long-term value.
1. Occidental Petroleum
Buffett significantly increased his stake in Occidental Petroleum (NYSE: OXY) this December, acquiring 8.9 million shares for approximately $409 million. This purchase boosts Berkshire Hathaway’s ownership to 28.2% of Occidental’s common stock, alongside $8.3 billion in preferred shares earning an 8% dividend.
Occidental’s strong presence in the Permian Basin—a low-cost oil and gas production region—remains a key attraction for Buffett. Despite recent challenges, including disruptions in natural gas transportation, the company is on track for a rebound.
Highlights:
- Growth Potential: Management projects $300–$400 million in annual cost savings by Q3 2025 due to reduced transport costs.
- Chemicals Business Expansion: Upgraded facilities are expected to add another $300–$400 million to EBITDA.
Trading at an enterprise value-to-EBITDA ratio of just 5.6, Occidental shares appear to offer substantial value, making this investment a natural choice for Buffett.
2. Sirius XM
Sirius XM (NASDAQ: SIRI) has found favor within Berkshire Hathaway’s portfolio, with an additional $107 million spent to acquire nearly 5 million shares. This brings Berkshire’s total stake in the satellite radio giant to $2.7 billion.
Despite management’s cautious 2025 revenue outlook, Sirius XM has long-term growth prospects. The company plans to expand its subscriber base from 39 million to 50 million through app-only services and ad-supported platforms.
Key Factors:
- Free Cash Flow Growth: Long-term projections indicate free cash flow could grow to $1.8 billion.
- Digital Expansion: Opportunities in podcast advertising and digital subscriptions enhance its potential.
At just 4 times analysts’ 2025 earnings estimates, Sirius XM shares are attractively priced, making this a compelling addition to Berkshire’s holdings.
3. Verisign
Buffett has rekindled his interest in Verisign (NASDAQ: VRSN), investing $45 million in the domain registry service provider this month. This brings Berkshire Hathaway’s total stake to $2.6 billion, representing 13.6% of Verisign’s shares.
Verisign holds exclusive rights to manage .com and .net domain names, with contracts extending into the next decade. These contracts allow Verisign to raise prices by up to 7% annually for .com domains and up to 10% for .net domains during the final years of their agreements.
Why Buffett Likes Verisign:
- Market Dominance: .com and .net remain the most sought-after domains for businesses and individuals.
- Consistent Growth: Small annual growth in domain registrations and predictable price increases make Verisign a steady performer.
- Low Risk: Contracts automatically renew as long as service levels are maintained, securing its position in the market.
Currently trading at 23 times 2025 earnings estimates, Verisign offers a combination of steady revenue growth and operating leverage, making it a strong contender for long-term gains.
Why Buffett’s Moves Matter
Buffett’s recent investments underscore his focus on finding value amidst a challenging market. While rising valuations make stock-picking harder, his disciplined approach and preference for companies with solid fundamentals and future growth potential remain unchanged.
Investors looking for inspiration can take cues from Buffett’s latest portfolio adjustments, which highlight opportunities in energy, media, and tech-enabled infrastructure.