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3 weeks ago
Where Fundamentals Meet Technicals: OXY
By: Lyn Alden Schwartzer | June 28, 2024
This issue of Where Fundamentals Meet Technicals re-iterates my bullish view on energy names.
As I sit here typing this piece in Cairo, I can unfortunately report that Egypt faces daily rolling power outages, which are caused primarily by natural gas shortages. The grid operators spare my neighborhood from them, but most neighborhoods throughout Egypt are facing recurring scheduled power outages as the limited power generators can only power so many of them at once.
Egypt produces lots of gas domestically and also imports gas from Israel, but the total amount is increasingly insufficient for Egypt in the summer months when air conditioning demand is at its highest. They are turning to LNG imports, but there is limited capacity for that in the near term.
This anecdote is one of many, since it’s a common occurrence throughout the developing world. But it underscores how important energy is. There is vast demand for energy throughout emerging markets, and in the long run I expect that their total usage will go up considerably.
In particular, when the dollar index puts in more of a local top, and the Fed begins a rate-cutting cycle, it should alleviate the USD-denominated debt burdens of a number of emerging and frontier markets, and lighten up their liquidity situation enough to active more energy demand.
Occidental Petroleum
Occidental Petroleum (OXY) has been a Buffett darling for a while; Berkshire (BRK.B) just keeps eating it up and now owns over a quarter of the company. It’s a potential acquisition target in the long run.
Zac recently wrote about the stock (and sector):
“It is not like I ENJOY making things diagonals... (well maybe a bissel)
But we are in a larger diagonal for most of the energy names off 2020 lows so this (5) is an ABC. And thus inside the subwaves of the it is not at all abnormal for some of those moves to be diagonals themselves.
The move off the low could be i-ii of (i) of circle here on OXY but it is a bit large for that give the expected size for (i)... it is too small to reliably be a nest (i)-(ii)-i-ii of an impulse for circle c also.
But an a-b and micro 1-2 of c in blue for (i) of an ED would fit very well based on expected circle c-wave Fib PinBall.”
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1 month ago
Occidental Petroleum Insider Trading Alert: Warren Buffett loves $OXY! Berkshire Hathaway just loaded up again with a purchase of 1,750,308 shares worth approximately $105.5 million
By: Barchart | June 13, 2024
• Occidental Petroleum Insider Trading Alert
Warren Buffett loves $OXY! Berkshire Hathaway just loaded up again with a purchase of 1,750,308 shares worth approximately $105.5 million
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1 month ago
Berkshire Hathaway Buys Additional 2.6 Million Shares of Occidental Petroleum
By: MT Newswires | June 10, 2024
Berkshire Hathaway BRK.A bought an additional 2.57 million shares in Occidental Petroleum's OXY
common stock over June 5 to June 7, the energy producer said Friday in a regulatory filing.
Following the recent share purchases, Berkshire Hathaway currently owns about 250.6 million shares of Occidental Petroleum, Reuters reported. Berkshire controlled around 28% shares of Occidental Petroleum as of March, according to the report.
Berkshire Hathaway bought 524,340 shares at $59.7452 per share on June 5, followed by 654,293 more shares bought for $59.934 per share on June 6, and an additional 1,386,844 shares purchased at $59.6687 per share on June 7.
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1 month ago
Occidental Petroleum, Berkshire Hathaway form JV to extract lithium
By: Reuters | June 4, 2024
Occidental Petroleum OXY said on Tuesday it had entered into a joint venture with Berkshire Hathaway's BRK.A energy unit to extract lithium.
The energy producer said it would use its technology to extract and commercially produce high-purity lithium compounds at Berkshire's geothermal facility in California.
Lithium is the key metal used in the production of batteries for electric vehicles, consumer electronics and energy grid storage.
Oil majors are investing in the electrification sector as governments in the United States and Europe establish programs to promote the wider use of EVs and reduce fossil-fuel consumption.
Exxon Mobil XOM has plans to start producing lithium from sub-surface wells by 2027, while European oil rivals BP BP. and Shell SHEL have invested in EV charging stations as part of their energy transition strategies.
Occidental said the project would demonstrate the feasibility of using its unit's direct lithium extraction technology to produce lithium in an environmentally safe manner.
BHE Renewables, Berkshire's energy unit, operates 10 geothermal power plants in California's Imperial Valley that can process 50,000 gallons of lithium-rich brine per minute to produce 345 megawatts of clean energy.
Upon successful demonstration, BHE Renewables plans to build, own and operate commercial lithium production facilities in California's Imperial Valley.
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2 months ago
Occidental Petroleum Corporation (OXY) Is a Trending Stock
By: Zacks Investment Research | May 24, 2024
Occidental Petroleum OXY has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this oil and gas exploration and production company have returned -8.7%, compared to the Zacks S&P 500 composite's +4% change. During this period, the Zacks Oil and Gas - Integrated - United States industry, which Occidental falls in, has lost 6.8%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate Revisions
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Occidental is expected to post earnings of $0.96 per share for the current quarter, representing a year-over-year change of +41.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +5.1%.
The consensus earnings estimate of $3.89 for the current fiscal year indicates a year-over-year change of +5.1%. This estimate has changed +1% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $4.94 indicates a change of +27.1% from what Occidental is expected to report a year ago. Over the past month, the estimate has changed -2%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Occidental is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue Growth
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Occidental, the consensus sales estimate of $7.41 billion for the current quarter points to a year-over-year change of +10.1%. The $30.23 billion and $33.44 billion estimates for the current and next fiscal years indicate changes of +4.5% and +10.6%, respectively.
Last Reported Results and Surprise History
Occidental reported revenues of $6.01 billion in the last reported quarter, representing a year-over-year change of -17.2%. EPS of $0.65 for the same period compares with $1.09 a year ago.
Compared to the Zacks Consensus Estimate of $6.66 billion, the reported revenues represent a surprise of -9.79%. The EPS surprise was +16.07%.
Over the last four quarters, Occidental surpassed consensus EPS estimates two times. The company topped consensus revenue estimates two times over this period.
Valuation
No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Occidental is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom Line
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Occidental. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
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4 months ago
Occidental Petroleum Corporation (OXY) Is a Trending Stock: Facts to Know Before Betting on It
By: Zacks Investment Research | March 6, 2024
Occidental Petroleum
OXY
is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this oil and gas exploration and production company have returned +5.2% over the past month versus the Zacks S&P 500 composite's +2.9% change. The Zacks Oil and Gas - Integrated - United States industry, to which Occidental belongs, has gained 3.9% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate Revisions
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Occidental is expected to post earnings of $0.67 per share for the current quarter, representing a year-over-year change of -38.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -26.8%.
The consensus earnings estimate of $3.67 for the current fiscal year indicates a year-over-year change of -0.8%. This estimate has changed -14.2% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $4.75 indicates a change of +29.4% from what Occidental is expected to report a year ago. Over the past month, the estimate has changed -3.2%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Occidental.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue Growth
While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Occidental, the consensus sales estimate of $6.83 billion for the current quarter points to a year-over-year change of -5.9%. The $29.87 billion and $32.48 billion estimates for the current and next fiscal years indicate changes of +3.3% and +8.7%, respectively.
Last Reported Results and Surprise History
Occidental reported revenues of $7.53 billion in the last reported quarter, representing a year-over-year change of -9.6%. EPS of $0.74 for the same period compares with $1.61 a year ago.
Compared to the Zacks Consensus Estimate of $7.14 billion, the reported revenues represent a surprise of +5.47%. The EPS surprise was 0%.
Over the last four quarters, the company surpassed EPS estimates just once. The company topped consensus revenue estimates two times over this period.
Valuation
No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Occidental is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Conclusion
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Occidental. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
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5 months ago
Occidental Petroleum (OXY) Stock Edges Higher Before Earnings
By: Schaeffer's Investment Research | February 12, 2024
• The company will report fourth-quarter earnings after the close on Thursday, Feb. 15
• Shares are down 11.6% in the last 12 months
Occidental Petroleum Corp (NYSE:OXY) is set to report fourth-quarter earnings after the close on Thursday, Feb. 15. The equity was last seen up 1.1% to trade at $58.09 at last check, but is still under the 60-day moving average, despite a brief foray above the trendline in December. Shares are down 11.6% in the last 12 months, and also carry a slim year-to-date deficit.
As far as as post-earnings reactions are concerned, OXY's history is less than stellar. The stock finished five of the past eight next-day sessions lower, including an 9.2% dip in November 2022. Shares averaged a move of 3% in the past two years, regardless of direction, but the options pits are pricing in a larger-than-usual swing of 4.5% this time.
Options traders lean overwhelmingly bullish. This is per the stock's 10-day call/put volume ratio of 4.82 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that sits higher than all but 4% of readings from the past year.
Analysts are skeptical, with 12 of the 19 firms in coverage calling OXY a tepid "hold" or worse, while the average 12-month target price of $66.84 is a 14.8% premium to current levels. It's also worth noting the 52.11 million shares sold short makes up 8.3% of the stock's available float.
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7 months ago
Occidental Petroleum (OXY) Eyes Best Day Since October
By: Schaeffer's Investment Research | December 14, 2023
• Berkshire Hathaway bought 10.5 million shares of OXY
• Options traders are chiming in on the oil name's newsy day
Occidental Petroleum Corp (NYSE:OXY) stock is on the rise today, after news that Warren Buffet's Berkshire Hathaway (BRK.A) bought 10.5 million shares worth about $588.7 million. This news came the same day as reports that Occidental Petroleum is purchasing oil & gas producer CrownRock for $12 billion.
At last look, OXY was up 3.5% to trade at $59.18, moving further from its recent Dec. 12 52-week low of $55.12, and now on track to log its best daily performance since October. Today's pop has the stock back above its 20-day moving average, which has helped guide the shares lower since October, and the shares are now on track to snap a five-week losing streak.
Options bulls are blasting the oil name in response. So far, 56,000 calls have been exchanged -- six times the call volume typically seen at this point -- in comparison to 17,000 puts. Expiring tomorrow, the December 60 call is the most active contract, with new positions being bought to open there.
Bullish sentiment in the options pits has been the standard for a while now, too. OXY's 50-day call/put volume ratio of 3.38 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 98% of readings from the past year.
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7 months ago
Occidental Petroleum (OXY) stock adds 2% as Buffett buys more shares
By: Investing | December 14, 2023
Occidental Petroleum (NYSE:OXY) disclosed that Berkshire Hathaway purchased $590 million of its stock, acquiring 10.5 million shares between December 11-13, 2023.
The average share price for this transaction was $56.16, which was 1.9% below the closing price on the reported day of $57.22.
The stock rose 2.2% on the news.
“We expect OXY to have a slightly positive reaction vs. peers” on Thursday, analysts at Roth MKM said in a note.
“We rate Occidental Petroleum Neutral due to its more levered balance sheet, the potential peak of chemicals earnings in 2022, its lower long-term production growth rate vs. peers and we don't think Buffett buys the entire company.”
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7 months ago
Occidental Petroleum (OXY) to acquire CrownRock for $12 billion
By: Investing | December 11, 2023
Occidental (NYSE:OXY), the energy giant, has announced its acquisition of CrownRock LP, an oil and gas producer based in Midland.
The deal, valued at approximately $12 billion, encompasses both cash and stock, and involves assuming CrownRock's existing debt.
“We believe the acquisition of CrownRock’s assets adds to the strongest and most differentiated portfolio that Occidental has ever had. We found CrownRock to be a strategic fit, giving us the opportunity to build scale in the Midland Basin and positioning us to drive value creation for our shareholders with immediate free cash flow accretion,” said Occidental President and Chief Executive Officer Vicki Hollub.
“We are excited about combining CrownRock’s high-performing team into our organization and expect to continue Occidental’s exceptional operational and financial results for years to come.”
CrownRock LP is a joint venture between CrownQuest Operating and Lime Rock Partners.
The acquisition is strategically aimed at enhancing Occidental's financial position, with expectations of delivering increased free cash flow on a diluted share basis.
The company anticipates generating $1 billion in the first year following the acquisition, based on a reference price of $70 per barrel for WTI crude oil.
Earlier today, Morgan Stanley analysts upgraded OXY's stock rating to Overweight.
OXY shares are down 0.3% in pre-market Monday.
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8 months ago
Occidental Petroleum falls on report of deal to acqurie CrownRock
By: Investing | November 30, 2023
Occidental Petroleum (NYSE:OXY) is in talks to buy Permian operator CrownRock for well over $10 billion, including debt, the Wall Street Journal reported overnight citing people familiar with the matter.
A deal between the two could be announced over the near term as long as talks don't fall apart or another suitor doesn't outbid Occidental.
Shares of Occidental traded down 1.5% mid-day amid the report.
CrownRock is one of the last remaining privately held companies in the Permian and produces about 150,000 barrels of oil equivalent a day.
Warren Buffett's Berkshire Hathaway owns a 26% stake in Occidental and commented in the past that they wouldn't seek to acquire the entire company.
Earlier in the fall, speculation suggested that oil giant Chevron (NYSE:CVX) was kicking the tires of Occidental, but talks between the two fizzled. In October, Chevron agreed to acquire Hess (NYSE:HES) in a $53 billion all-cash deal. This deal closely followed Exxon Mobil's nearly $60 billion all-stock deal for Pioneer Natural Resources (NYSE:PXD), highlighting the frenzy of deal activity in the sector.
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8 months ago
Trexquant Investment LP Acquires Shares of 104,517 Occidental Petroleum Co. (OXY)
By: MarketBeat | November 25, 2023
• Trexquant Investment LP acquired a new stake in shares of Occidental Petroleum Co. (NYSE:OXY) during the 2nd quarter, according to its most recent 13F filing with the SEC. The firm acquired 104,517 shares of the oil and gas producer's stock, valued at approximately $6,146,000...
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8 months ago
Occidental Petroleum (OXY) beats quarterly profit estimates
By: Investing | November 7, 2023
(Reuters) - Occidental Petroleum (NYSE:OXY) beat estimates for third-quarter profit on Tuesday, as the U.S. oil and gas producer was aided by higher output amid sustained demand for energy.
On an adjusted basis, the company earned $1.18 per share, compared with average analysts' estimate of 84 cents per share, according to LSEG data.
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3 months ago
