3 Stocks Warren Buffett Is Likely Buying in December – The Motley Fool

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Warren Buffett doesn’t get in a hurry to invest. Even with the stock market in retreat this year, he has led Berkshire Hathaway (BRK.A -0.82%) (BRK.B -0.90%) to maintain a massive cash stockpile of more than $100 billion. 
But Buffett has definitely been buying some stocks, including stakes in eight companies in the third quarter alone. There’s also a good chance he’s still on the hunt for opportunities as 2022 draws to a close. Here are three stocks Buffett is likely buying in December.
We can put Berkshire Hathaway itself at the top of the list of stocks Buffett is probably buying this month. As my colleague Sean Williams recently pointed out, over the last six years, the legendary investor’s giant conglomerate has bought $9 billion more of its own stock than it has of Apple and Chevron combined.
These purchases have been made via Berkshire’s stock buybacks. Buffett and his longtime business partner Charlie Munger basically have an open checkbook for the company to repurchase shares when they think the stock is attractively priced.
In the first nine months of this year, the conglomerate bought back $5.2 billion worth of its shares, including $1 billion worth in Q3.
That doesn’t mean Buffett is necessarily continuing to buy back Berkshire Hathaway shares, of course. However, I’d be surprised if he isn’t doing so. The share price is lower now than it was during much of the first half of the year. 
It was looking for a while like Buffett had largely lost his ardor for bank stocks. However, he zigged when many might have thought he’d zag in Q3 by initiating a position in Jefferies Financial Group (JEF -0.50%).
Granted, Jefferies is a different kind of financial institution than the ones Buffett has favored in the past. It focuses exclusively on investment banking rather than commercial banking. It’s also much smaller than other banks that have been or still are in the Berkshire Hathaway portfolio.
I think the odds are high that Buffett bought more shares of Jefferies in Q4, and that activity has potentially continued into December. Why? Because Berkshire Hathaway only owned a very small stake in the company at the end of Q3.
This doesn’t guarantee that Buffett added to his position in Jefferies this quarter or is buying more shares in December. However, the unusually small initial stake in the financial company could indicate that those Q3 purchases were made near the end of the quarter, and that more buying followed.
Buffett has been backing up the truck and loading up on Occidental Petroleum (OXY -3.35%) this year. It’s a big and bold bet that’s already paying off. Oxy’s shares have skyrocketed by more than 130% year to date.
His buying frenzy with Occidental began in the first quarter and continued into the second and third. Based on the latest information available, Berkshire now owns 21.4% of Occidental. 
There are two main reasons why I suspect Buffett either has bought more shares of Occidental stock this quarter or will buy more in December. For one thing, Berkshire obtained regulatory approval in August to acquire up to 50% of the oil company. I don’t think that the conglomerate would have pursued that thumbs-up if there wasn’t a plan for it to buy a lot more shares of Occidental Petroleum.
The more important factor, though — in my view — is that Buffett believes that Occidental is a smart investment. The stock remains attractively valued despite its huge gains this year. Buffett also probably expects the tailwinds for the energy sector will continue to blow strongly into 2023 and perhaps beyond.
Keith Speights has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Jefferies Financial Group. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
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