Please ensure Javascript is enabled for purposes of website accessibility

Warren Buffett's Berkshire Hathaway Reveals Major New Stake in Chevron

By Eric Volkman - Feb 16, 2021 at 6:17PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The famous investor places a multi-billion dollar bet on oil.

Warren Buffett is making a contrarian play on black gold. The renowned stock picker's investment vehicle, Berkshire Hathaway (BRK.A 1.28%)(BRK.B 1.25%), revealed Tuesday that it recently opened a position in struggling energy giant Chevron (CVX 0.67%), with a holding of nearly 48.5 million shares.

This was disclosed in Berkshire's latest 13F, the quarterly report it is required to file detailing its holdings in publicly traded companies. This 13F is a snapshot of the company's positions as of Dec. 31.

Toy oil rig and barrel atop various denominations of currency.

Image source: Getty Images.

According to data compiled by Yahoo! Finance, Chevron currently has 1.93 billion shares outstanding, so Berkshire's holding comprises 2.5% of that total. At the time of the filing, Berkshire's holding was worth roughly $4.1 billion.

Quarterly reports designated as 13Fs are simply lists of stock positions; as such, they do not provide explanations for why a company buys a stock. Additionally, Berkshire as a company doesn't habitually offer justifications for its moves after they are revealed.

Yet the Chevron buy is entirely in character for Buffett who throughout his career has pounced on individual stocks and sectors that have fallen out of favor with investors. At the moment, the energy industry as a whole continues to suffer from weakened demand arising from the coronavirus pandemic.

As a result, the company posted a 30%-plus year-over-year fall on the top line in its most recently reported quarter and flipped to a non-GAAP (adjusted) net loss of $11 million. Chevron also hit the brakes hard on capital expenditures, which it cut by 35% in 2020 compared to the previous year.

Revelations of a fresh Berkshire buy often induce the "Buffett Effect" on a stock's price, and that dynamic was at work on Tuesday. Chevron's shares closed the day over 2% higher against the flat performance of the S&P 500 index.


Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Chevron Corporation Stock Quote
Chevron Corporation
$176.59 (0.67%) $1.18
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
$468,805.04 (1.28%) $5,915.04
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
$312.50 (1.25%) $3.86

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.