Warren Buffett never differed high activity in terms of shopping in the stock market. His actions over the past few years are extremely conservative.

However, recently in the behavior of the Buffett there was a sharp change, he decided to click on the trigger and began to buy large volumes of shares of individual companies.

We all know that Buffett rich, because it always knew how to notice the shares of good companies at a price below their book value.

Many investors will definitely want to copy Buffett's actions in the hope of success. Therefore, let's deal with this theme in more detail.

Occidental Petroleum.

So, Recently Warren Buffett reported on the purchase of Occidental Petroleum shares for $ 4.5 billion a week after the first message, he acquired more shares for $ 1.5 billion. And after another week, he bought 18.1 million shares worth $ 1 billion.

In total, the cost of the purchase was $ 7 billion and now this is the 9th position in his portfolio. Now the Buffett has more than 13% of all Occidental shares issued.

Let's try to understand what he was guided when I bought Occidental shares.

Unfortunately, Buffett did not speak publicly and did not explain why he bought these shares. However, CNBC reported an extra-essential conversation with the investor, during which he said the following:

The company's report was something that prompted Buffett to immediately start buying shares of companies. Let's try to define several specific reasons that served as a trigger for purchase.

First first, this is the growth of financial indicators. The company's profit in 2021 increased from $ 146 million to $ 1.5 billion. Revenue increased from $ 5.3 billion to $ 7.9 billion.

The second, a significant improvement in the balance. Occidental reduced $ 6.7 billion debt and increased its own capital.

Also, they increased dividends from $ 0.01 to $ 0.13. And in decoding it says that they set themselves the goal to achieve dividend yield at the S & P 500 level.

The result is that the operating performance has improved on average per 1.17 barrels of oil equivalent per day (it is 27,000 more of their original plan).

👉 And the last reason is probably lies in the fact that they raised stability. Occidental is one of the few oil and gas companies that have set itself the goal to achieve a zero level of emissions, and they managed to reduce direct and indirect CO2 emissions.

If we add all these advantages and take into account the fact that the CEO of Occidental has similar to the value of value, it becomes clear why the famous investor paid attention to them.

Today they are sold at a price of $ 55 per share. Despite the fact that quite recently, the shares cost in the area of ​​$ 30, Buffett began to buy on only after February 25 he read the profit and loss statement.

Therefore, he entered at about $ 56. Buffett, also, has warrants to purchase another 84 million shares at the price of execution just less than $ 60 per share - this means that we can still log in at the same price, which bought the buffett himself.

Alleghany Corporation.

Buffett decided not to stop at Occidental and largely invested in the insurance company - Alleghany ($ 11.6 billion left for the purchase).

This is one of the 5 largest acquisitions in the history of Berkshire Hathaway. Buffett bought a company at an average price of $ 848 per share (approximately 25% higher than its average cost for the last month).

Why did he decide to buy this company?

The first, the company's P / E coefficient is 10.5, which is much cheaper than the market coefficient P / E - 25.7. Therefore, Buffett considers the purchase of successful.

The second, this is an insurance company, followed by the Buffett for a long time. He bought his first stake in the insurance business back in 1967 and said that he had carefully watched Alleghany for over 60 years.

Thirdly, Buffettu likes the executive director of Alleghany - Joseph Brandon. It is interesting that he led BERKSHIRE HATHAWAY in 2001 to 2008, and Buffett said that they both share the business management philosophy in the long run.

Recently, Buffett has accumulated in cash more than $ 146.7 billion and kept them for a successful case. Apparently, the moment has come, and the right decision he accepted, only time will show.

Today, thanks for your attention!

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