Trade Call on Occidental Petroleum as a Buying Opportunity

11 days ago

"One of those stocks is Oxidental Petroleum. I would prefer accidental over Chevron and Exxon because I believe those two stocks are priced at a premium and I think accidental is undervalued on a relative basis and it also has a lot of catalysts coming up. Now accidental is popular because Warren Buffett owns it through Berkshire Haway. The stock hasn't done too well, but recently they sold a legacy business of theirs, which is Oxidental Chemicals or OxyChem for 9.7 billion. And they got the 9.7 billion and they're going to be able to delever in a major major way and take their leverage down to 14.3 billion over the upcoming quarters. Once they reach that target of under 15 billion, the company will finally start to buy stock. So that would be a major boost for the stock and the company because now they can't really return a lot of value to shareholders that's been waiting on the price. I've been waiting for some things to clear up. But if we do get to 40 $45 per barrel on crude oil, I would be a very happy buyer of accidental petroleum. And I might potentially even sell puts on the stock and collect some massive massive premium."

The speaker presents a trade call favoring Occidental Petroleum (OXY), asserting that, compared to Chevron and Exxon, Occidental is undervalued with strong catalysts such as deleveraging from a recent asset sale and potential stock buybacks once debt targets are met. The recommendation is contingent on crude oil prices dropping to the 40 to 45 range, positioning it as a strategic buying opportunity.

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