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Zacks Value Trader Highlights: Occidental Petroleum, Chevron, Diamondback Energy, APA and TotalEnergies
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For Immediate Release
Chicago, IL – February 26, 2024 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2231055/buffett-sticks-with-energy-stocks-should-you)
Buffett Sticks with Energy Stocks: Should You?
Welcome to Episode #359 of the Value Investor Podcast.
(0:45) - Should You Follow Warren Buffett's Investment Strategy?
(10:00) - What Has Berkshire Hathaway Been Buying and Selling?
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
The 13-F filings for the fourth quarter of 2023 were out this month. Those filings tell us what the big hedge fund and money managers are buying, and selling, in their portfolios. For years, the Value Investor podcast has looked at the 13-F filings for Warren Buffett's Berkshire Hathaway equity portfolio.
As of the end of the third quarter of 2023, Berkshire Hathaway was sitting on a record amount of cash totaling $157.2 billion. Was Buffett going to deploy any of it into buying more stocks?
Apparently, the answer is "yes." Although he didn't spend much of the cash hoard doing it.
Berkshire bought shares of Occidental Petroleum throughout 2023. It continued to buy more Occidental Petroleum in 2024. We only know about the 2024 Occidental purchases because they fall outside of the 13-F reporting requirements.
Occidental Petroleum is now Berkshire's seventh largest holding in the equity portfolio, but it still remains a small percentage overall, at just 4.06%.
Occidental pays a dividend, currently yielding 1.5%. Berkshire receives $218.3 million in dividend income from this position.
Should investors be following Buffett into Occidental Petroleum in 2024?
Berkshire Hathaway has owned shares of Chevron since the fourth quarter of 2020. It has bought, and sold, several times through those 3 years. However, Berkshire had not added to its position since the first quarter of 2022, until last quarter when it bought 15.8 million shares.
Why buy more now?
Chevron is cheap. It has a PEG ratio of just 0.8. Earnings estimates have been cut, however, as oil and natural gas prices have fallen. Earnings are expected to fall 0.8% in 2024.
Chevron pays a dividend, currently yielding about 4%.
Should you be buying Chevron now that Buffett has bought more?
3 Cheap Energy Stocks for 2024
Most of the energy stocks are cheap. They fell out of favor in 2023. For value investors, that means it's a buying opportunity.
Here are some additional energy companies that are trading with low valuations in 2024.
Diamondback Energy is a big Permian Basin producer of oil and natural gas. It recently announced it would buy Endeavor Energy Partners for $26 billion. Shares of Diamondback Energy have jumped 31.7% in the last year and are now at new 5-year highs. It's one of the few energy stocks to be breaking out.
Diamondback Energy is still cheap, with a forward P/E of 9.8. It pays a base dividend yielding 1.9% but did say it was lowering its payout to shareholders to 50% of free cash flow from 75% in 2023 due to the costs of the acquisition.
APA is an international oil and natural gas producer with drilling in Egypt, the United States, the North Sea and Suriname. It's in a 50/50 partnership with TotalEnergies in Suriname. Shares of APA have sunk 17% over the last year and are trading near 52-week lows.
APA is dirt cheap with a forward P/E of just 6.1. It also pays a dividend, yielding 3.1%.
TotalEnergies is a French energy company with global oil production. It has partnered with APA in Suriname. Shares of TotalEnergies are up just 2.2% over the last year.
TotalEnergies remains a cheap stock with a forward P/E of just 6.9. It also pays a dividend, which is currently yielding 5%.
Should investors seek out a European energy giant like TotalEnergies in 2024?
What Else Do You Need to Know About Buffett and Energy Stocks?
Tune into this week's podcast to find out.
[In full disclosure, Tracey owns shares of CVX and APA in her personal portfolio.]
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Value Trader Highlights: Occidental Petroleum, Chevron, Diamondback Energy, APA and TotalEnergies
For Immediate Release
Chicago, IL – February 26, 2024 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2231055/buffett-sticks-with-energy-stocks-should-you)
Buffett Sticks with Energy Stocks: Should You?
Welcome to Episode #359 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
The 13-F filings for the fourth quarter of 2023 were out this month. Those filings tell us what the big hedge fund and money managers are buying, and selling, in their portfolios. For years, the Value Investor podcast has looked at the 13-F filings for Warren Buffett's Berkshire Hathaway equity portfolio.
As of the end of the third quarter of 2023, Berkshire Hathaway was sitting on a record amount of cash totaling $157.2 billion. Was Buffett going to deploy any of it into buying more stocks?
Apparently, the answer is "yes." Although he didn't spend much of the cash hoard doing it.
Berkshire Dives into Energy
1. Occidental Petroleum (OXY - Free Report)
Berkshire bought shares of Occidental Petroleum throughout 2023. It continued to buy more Occidental Petroleum in 2024. We only know about the 2024 Occidental purchases because they fall outside of the 13-F reporting requirements.
Occidental Petroleum is now Berkshire's seventh largest holding in the equity portfolio, but it still remains a small percentage overall, at just 4.06%.
Occidental pays a dividend, currently yielding 1.5%. Berkshire receives $218.3 million in dividend income from this position.
Should investors be following Buffett into Occidental Petroleum in 2024?
2. Chevron Corp. (CVX - Free Report)
Berkshire Hathaway has owned shares of Chevron since the fourth quarter of 2020. It has bought, and sold, several times through those 3 years. However, Berkshire had not added to its position since the first quarter of 2022, until last quarter when it bought 15.8 million shares.
Why buy more now?
Chevron is cheap. It has a PEG ratio of just 0.8. Earnings estimates have been cut, however, as oil and natural gas prices have fallen. Earnings are expected to fall 0.8% in 2024.
Chevron pays a dividend, currently yielding about 4%.
Should you be buying Chevron now that Buffett has bought more?
3 Cheap Energy Stocks for 2024
Most of the energy stocks are cheap. They fell out of favor in 2023. For value investors, that means it's a buying opportunity.
Here are some additional energy companies that are trading with low valuations in 2024.
1. Diamondback Energy (FANG - Free Report)
Diamondback Energy is a big Permian Basin producer of oil and natural gas. It recently announced it would buy Endeavor Energy Partners for $26 billion. Shares of Diamondback Energy have jumped 31.7% in the last year and are now at new 5-year highs. It's one of the few energy stocks to be breaking out.
Diamondback Energy is still cheap, with a forward P/E of 9.8. It pays a base dividend yielding 1.9% but did say it was lowering its payout to shareholders to 50% of free cash flow from 75% in 2023 due to the costs of the acquisition.
Should Diamondback Energy be on your short list?
2. APA Corp. (APA - Free Report)
APA is an international oil and natural gas producer with drilling in Egypt, the United States, the North Sea and Suriname. It's in a 50/50 partnership with TotalEnergies in Suriname. Shares of APA have sunk 17% over the last year and are trading near 52-week lows.
APA is dirt cheap with a forward P/E of just 6.1. It also pays a dividend, yielding 3.1%.
Should APA be on your short list?
3. TotalEnergies SE (TTE - Free Report)
TotalEnergies is a French energy company with global oil production. It has partnered with APA in Suriname. Shares of TotalEnergies are up just 2.2% over the last year.
TotalEnergies remains a cheap stock with a forward P/E of just 6.9. It also pays a dividend, which is currently yielding 5%.
Should investors seek out a European energy giant like TotalEnergies in 2024?
What Else Do You Need to Know About Buffett and Energy Stocks?
Tune into this week's podcast to find out.
[In full disclosure, Tracey owns shares of CVX and APA in her personal portfolio.]
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
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support@zacks.com
https://www.zacks.com/performance
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.