Western oil has increased the price of the stock god again, do you follow？

Two months after the Western Petroleum fell, Buffett increased 4.31 million Western oil shares in the past two weeks, costing about 260 million US dollars, an increase of about 60 yuan.After two increases, Berkshire held a total of about 28.4%of Western oil.

Since Buffett bought Western petroleum in 2022, whenever the stock price falls below 60 yuan, it will increase its holdings. It is supported by the largest buyer Buffett, so that Western oil stock prices in the past two years have reached 55 yuan.But since last year, due to the performance of oil prices less than 22 years, Western oil has risen to about 70 yuan, and then shocked at 60-70 yuan.For Buffett, the good company he fancy has risen slowly, giving enough opportunities to buy enough. For investors who copy homework, the patience of many people can be used for two years.Isn't it worth buying at 60 yuan now?I. The source of the stock god and Western oil review the reasons why Buffett bought Western oil. Looking at the transaction records of the stock gods in the past 2 years, the positions were built at 40 yuan, and the subsequent increase in holdings was completed at 55-60 yuan.Continuously increasing holdings at the same price is related to a financing of the stock god in 2019.In April 2019, Western Petroleum and Chevron were a competitive battle for the oil company Anadak (Chevron is also one of Buffett's heavy warehouse stocks). Chevron's offer price was $ 33 billion. With a higher price,Signing an investment agreement with Anadaka first.Later, Western Petroleum CEO asked Buffett to receive $ 10 billion of M & A funds. With the support of Buffett, Western oil was successfully acquired for $ 38 billion, and finally acquired Anadaka.As a exchange, Berkshire obtained a $ 10 billion Western oil priority shares with a dividend rate of 8%, and attached to the future purchase of 80 million ordinary shares to subscribe for the right to subscribe. The exercise price was $ 62.5.This meant that Buffett thought that the company's inherent value was more than $ 62.5 per share, which was similar to the company's stock price at that time. At that time, PE was 11 times and PB was 2.2 times.Buffett said in an interview that the subscription equity agreement was a long -term increase in betting oil prices.The preferred shares provide 8%of the dividend, and the company's dividend rate was 5-6%at that time. This transaction provided Buffett with a lot of security margins.Although Western Petroleum won the M & A war, small and medium shareholders believe that M & A brings a lot of debt pressure (US $ 13 billion of bills+$ 10 billion in preferential shares+US $ 8.8 billion loans). In 2019, the company's book cash was only 3.5 billion US dollars.Based on debt concerns, small and medium shareholders did not consider this to be a good merger and started to sell Western oil. From April 199 to early 20 years, Western oil once fell 30%.Buffett believes that this is a wrong kill. When it fell, he added a total of about 19 million shares.But what made Buffett did not expect that the global epidemic broke out in 2020, and oil prices fell to negative numbers, causing Western oil to fall into a crisis of bankruptcyAgra Investment. Buffett cleared Western oil stocks at the bottom, with a loss of nearly 70%and a total of $ 550 million.From the perspective of performance, in 2020, Western oil net loss was US $ 14.8 billion, and the stock price also fell from 40 to $ 10.In addition, the losses and the debt were overweight. In 2020, Western oil was only divided into $ 35 million, which was far lower than the level of more than $ 2 billion in several years in previous years.Based on such a tragic situation, even if Western oil has rebounded in the second half of 2020, Buffett did not buy back Western oil.Until the 2021 report, Western Petroleum CEO stated that it would no longer carry out large -scale production and mergers and acquisitions in the future. The money made by priority reduced corporate debt, followed by redemption of preferred shares, and then began to restore dividends and repurchase stocks.At the same time, oil and gas companies in the United States have basically no longer expanding investment, shrinking investment, and the industry supply side has shrunk faster than the consumption side.As the epidemic dissipated, oil prices rose from $ 50 at the end of 2020 to $ 110 in 2022.According to Buffett at a shareholders' meeting, he learned that Western oil was given priority to debt repayment, and in the future, he did not expand its production in the future, and decided to buy back Western oil back.In March 2022, Buffett bought 14%of the 60%circulation stocks of Western Petroleum, and continued to buy in the third quarter of 22 until the increase of the holdings of 20%.According to the SEC document, due to the anti -dilution clauses in the financing agreement, Buffett's exercise prices fell to $ 59.6, and the number of exercise shares became 83.86 million shares.In the past two years, Buffett has continued to increase its holdings in the $ 55-60 interval because it is close to his original cost price.According to Whalewisdom statistics, as of 2024Q1, the cost price of Buffett in Western oil is about 50 yuan.To some extent, Western oil that determines not to expand in the future is more attractive to Buffett than in 2019.Because in the past, in the stage of expanding production or acquisition, more risks and competition must be considered.And after deciding that the production is not large -scale, as long as the oil price is in line with Buffett's "long -term" rising, the supply side is limited, the money earned by the company is used for shareholders' return, and the company becomes a cash dairy cow. This is also the favorite investment model of Buffett.one.This logic is a bit similar to the coal company after the supply -side reform. It is also a new energy source to replace traditional energy, which leads to traditional energy unwilling to expand production.Question.2. Where is the attraction of Western oil?In the past year, Buffett's shareholding ratio has increased from 19%to 28.5%, which has increased its holdings so much, but the stock price has fallen by 5%since January last year.It's right.From the perspective of Buffett, Munger mentioned before that holding Western oil and Chevron, which is equivalent to oil and natural gas resources with the Permian Basin.Why do you choose these two companiesLucknow Investment?First, from the perspective of transaction, Berkshire is large enough. There are not many American oil and gas companies that meet Buffett's investment requirements and accept large -scale shares.Most investors think that Buffett wants to occupy a certain share in the US oil industry, which is a farther strategic investment.Second, from the perspective of shareholders 'return, only 3 oil and gas companies in 2023 realized that shareholders' return was growing, namely Chevron and Western oil, as well as ExxonMobil.The cash flow of major oil and gas companies in 2023 fell around 20-25%year-on-year. In this case, it still maintained a positive growth of shareholders. This is the biggest advantage of three.The proportion of shareholders of Western Petroleum and Exxon Mobil accounted for more than 90%of the free cash flow, while Chevron mentioned more than 120%.Source: Cybershaman's comparison of colleagues, you can know that the capital expenditure of Chevron and Western oil is the two smallest in the industry, but the return of shareholders is the best in the industry.Picture source: Cybershaman, although the shareholders of Western oil in the industry are at the forefront of the industry, but I have to say that because the god of stock gods has 8%interest of $ 10 billion in preferred shares, plus 23 years of company dividends of US $ 674 million, and the dividend rate is 1.27%, even if the stock priceThe shock does not rise, and there are high interest incomeMumbai Wealth Management. Compared with the small shareholders, there is less money.It is not difficult to know why Buffett wants to buy Western oil. If the future profit increases and the liability decreases, the dividend return to shareholders will increase, and the dividend rate will increase to about 3-5%of the historical level.10%benefits.Of course, 10 billion preferred shares will always be repurchased, which can also explain why Buffett continues to buy, and it is one of the reasons for the reasons to generate a lot of interest income in the future.So why do Chevre and Western oil choose the lowest capital expenditure and give the highest shareholders in the industry?This can take the performance of this year in the first quarter of this year. Compared with the first quarter of last year, oil prices have not changed much. They are basically about 70-80 yuan.However, in the first quarter of this year, Western oil revenue was US $ 5.975 billion, a year -on -year decrease of 17.3%, and net profit was 880 million US dollars, a year -on -year decrease of 29.7%.Another of Buffett's position, Chevron's 24Q1 revenue was $ 48 billion, a year -on -year decrease of 4.8%, and net profit was $ 5.5 billion, a year -on -year decrease of 16.3%.From the perspective of crude oil trend, oil prices rose from 75 yuan to 87 yuan in the first quarter, and oil prices rose, which caused many oil and gas companies to increase mining. When mining such oil wells, a large number of accompanying natural gas will be produced.Because the United States is warm winter this year, the demand for natural gas is in a state of atrophy, and the inventory level is nearly 40%higher than the average level in the past 5 years.In addition, the supply of natural gas during oil collection has led to a lower price of natural gas than last year, and even in April, it also created negative gas prices.It is precisely because the price of natural gas in the United States will greatly affect the performance of American oil and gas companies. At the stage of good oil prices, try to create more shareholders 'return and reduce leverage. The remaining money is used for shareholders' return.Enterprise, this is a more stable approach.For example, Western oil may have 3-5%of the dividend in the future, coupled with the preferred shares of Buffett's 8%interest, and Chevron's dividend rate is 4-6%.Third, the conclusion is that the dividend repurchase at this stage does not attract small shareholders because of cash flow priority.From the perspective of valuation, the Western oil PE is currently about 15 times. From the perspective of operating capabilities or dividends, it is actually far from A/H's CNOOC, and H -shares CNOOC PE is about 6.5 times.The dividend rate.For investors, India's oil stocks are more underestimated, but unfortunately Buffett cannot buy Hong Kong stocks.However, it is worth noting that it took 3 years to build a warehouse apple for 3 years. It took 5 years to usher in a rising. In the long run, this investment needs more patience.Picture source: Cybershaman