Warren Buffett Bets on Two Stock Gems: An Overview

Warren Buffett, the legendary investor whose holding company Berkshire Hathaway holds more than 40 stocks, has often impressed with his long-term investment strategy over the years. Two of his current investments offer particularly attractive opportunities, each occupying a different position within their respective industries. First, BYD stands out as a remarkable player. The Chinese electric vehicle manufacturer defies the global downturn in the EV sector, reporting impressive sales figures. In September, new vehicle sales rose 32% year-over-year to 419,426 units. This underscores BYD's dominant market position in China, where the company has achieved a market share of 37%, compared to Tesla's 6%. BYD is not only a successful EV manufacturer but also the second-largest producer of EV batteries worldwide. Thanks to this vertical integration, the company skillfully manages the challenge of high battery costs. Its global operations, spanning North America, Europe, and Asia, demonstrate its aggressive expansion, especially in key markets such as Thailand. Another gem in Buffett's portfolio is Occidental Petroleum. Despite a decline in stock price due to falling oil prices, this stock remains particularly interesting in light of a recent acquisition. Occidental's acquisition of CrownRock for approximately $12 billion significantly expands its presence and promises a positive impact on free cash flow. In parallel, the company plans to divest assets valued between $4 and $6.5 billion to reduce debt. These strategic moves are particularly noteworthy as high debt levels have posed a challenge since the acquisition of Anadarko Petroleum. The company places great emphasis on dividends, having recently increased them by 22%—a sign of anticipated cash flow. Additionally, Occidental is investing heavily in carbon capture and storage technologies. Buffett has repeatedly shown his confidence in Occidental, with Berkshire Hathaway holding a significant 28.8% stake in the company, making Occidental Petroleum the sixth-largest position in Berkshire's portfolio. Right now, at the bottom of the 52-week range, entering could be advantageous.