Why Did Warren Buffett Significantly Increase His Stake in Chevron?
When Warren Buffett acts, the world listens
Buffett bucks the woke ESG agenda and overweight’s this dirty industry
- In the S&P500, the Energy sector makes up just 3.7%
- Buffett place a heavy bet on Energy
- The investment in Chevron and Occidental add up to around 10% of his portfolio
- This represents an Energy overallocation of 6.3%
Investing in Chevron means betting on rising oil prices
- There has been a 91% correlation between Chevron’s stock price and crude oil price over the past year
- Hence predicting the oil price will help to estimate Chevron’s revenue
How does the consensus assess Chevron?
- Analysts equally divided between BUY and HOLD
- In the past few months, analysts constantly increased their target price estimate in response to oil price shocks
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