Warren Buffett loaded up on shares of Occidental Petroleum(NYSE: OXY) throughout much of 2022. Unsurprisingly, he kept the buying spree going into this year. Buffett continued to buy shares of Occidental hand over fist earlier this month.
We don't know yet what other purchases Buffett has made so far in the first quarter of 2023. However, it's not hard to make what should be pretty good guesses. Here are the three stocks Buffett is most likely buying right now in addition to Occidental.
1. Berkshire Hathaway
If I had to bet on the stock Buffett is most likely buying this quarter, it would be his own Berkshire Hathaway(NYSE: BRK.A)(NYSE: BRK.B). The legendary investor and his longtime business partner, Charlie Munger, can buy back Berkshire stock whenever they think it's valued attractively.
Buffett and Munger clearly thought that Berkshire's valuation looked attractive in all four quarters of 2022. The only months when they didn't repurchase shares last year were in April and May.
Berkshire's share price is currently cheaper than it was throughout most of the first quarter of 2022. It's roughly in line with the levels in November and December. If Buffett and Munger thought the stock was worth buying in the past, they almost certainly haven't changed their minds.
Buffett remains a big proponent of stock buybacks when they're done at the right price. He even took a swipe at President Biden, who has publicly criticized buybacks and wants to increase taxes on them, in his latest letter to Berkshire shareholders. Buffett wrote, "When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive)."
2. Apple
Buffett only bought four stocks for Berkshire Hathaway in the fourth quarter of 2022. All of them were additions to existing positions, including more shares of Berkshire's biggest holding -- Apple(NASDAQ: AAPL).
Saying that Apple is the largest position in Berkshire's portfolio doesn't go far enough. The stock makes up 43.2% of Berkshire's total holdings, including shares owned by Berkshire subsidiary New England Asset Management.
But Apple's current price is now a little higher than it was throughout most of 2022 Q4. Why would Buffett still buy the stock? He would only do so if he believed the price is still a bargain. I think there's a reasonable argument that is his view.
Buffett also bought shares of Apple in the first quarter of last year. He told CNBC in May 2022 that he would have scooped up more of the stock had it not rebounded. Apple's current share price is near its lowest point in Q1 from a year ago.
3. Lousiana-Pacific
Louisiana-Pacific(NYSE: LPX) was another stock that Buffett bought in Q4 of 2022. He first initiated a position in the building-products stock in the third quarter of last year.
You might think that Louisiana-Pacific would be a horrible choice to buy right now. After all, higher interest rates have caused a slowdown in the housing market. The Federal Reserve has warned that more rate increases are on the way.
However, there are two important things to keep in mind about Buffett. First, he has a long-term mindset. Second, he focuses heavily on valuation. Both factors work to Louisiana-Pacific's advantage. Buffett knows there's still a need for more housing in the United States. He also recognizes that Louisiana-Pacific stock is dirt cheap with these great long-term prospects.
There's also the tiny detail that Louisiana-Pacific's share price is approaching the lower end of its trading range in the third and fourth quarters of 2022. If Buffett liked the stock enough then to buy it, he just might be buying again now or getting close to doing so.
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Keith Speights has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
