This Warren Buffett Stock to Own Forever Is a Buy Today

Key Points

• Speaker: Susan Dziubinski from Morningstar
• Topic: Analysis of a stock, Occidental Petroleum (OXY), considered by Warren Buffett to be a "forever stock" and currently a buy

Warren Buffett's Investment Strategy

• Known for identifying businesses with a strong competitive advantage.
• Plans to step down as CEO of Berkshire Hathaway at the end of 2025.
• Greg Abel to take over as CEO in January 2026, Buffett will continue as chairman.

Forever Stocks

• Stocks Buffett expects to hold indefinitely due to their strong market positions and successful business operations.
• Examples include Coca-Cola (KO) and American Express (AXP), both considered to have strong economic moats.

Current Stock Analysis

• Occidental Petroleum (OXY):
  • Berkshire Hathaway owns over 28% of the company.
  • One of the world's largest independent oil and gas producers.
  • Leading in carbon capture initiatives.
  • Has undergone deleveraging to improve its financial position.
  • Morningstar considers OXY undervalued, with a fair value estimate of $59 per share.
  • Despite Morningstar's view that OXY lacks an economic moat due to past acquisition costs, its financial health is improving.

Conclusion

• OXY is currently seen as a buying opportunity by Morningstar analysts due to its undervaluation and improved financial standing.
• For further investment insights, visit Morningstar.com.

Additional References

• Research Contribution: Josh Aguilar, Morningstar director.
• Further Viewing: "3 Stable Stocks to Buy When the Price Is Right" by Susan Dziubinski.

Important Notes

• The information represents analysis and opinions provided by Morningstar and does not constitute investment advice.