While many investors poured into the stock market last year, legendary investor Warren Buffett eased on the brakes. Berkshire Hathaway, the investment company Buffett founded and still leads, sold more stock shares than it bought during the first three quarters of 2024.
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That represented a departure from the norm, and mainly happened because it was hard to find decent value with so many stocks soaring to record highs. Berkshire did grow its position in a few companies late last year, however. Berkshire Hathaway invested more than $500 million in a trio of companies that are solidly profitable and potentially undervalued.
Here’s a look at the three companies and whether they might make good buys in 2025.
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Jan. 2 closing price: $49.81
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One-year return: -16.58%
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Average analyst share price target: $62.14
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Average 2025 earnings estimate: $3.56
Buffett spent about $409 million in December 2024 to purchase 8.9 million more shares of Occidental Petroleum, according to Securities and Exchange Commission filings. Berkshire Hathaway currently owns roughly 28.2% of Occidental.
Based in Houston, Occidental is an international oil energy company whose assets are mainly concentrated in the U.S., the Middle East and North Africa. It’s a leading oil and gas producer in the Permian and DJ basins, as well as offshore Gulf of Mexico, according to a company press release. In addition to oil and gas production, Occidental’s businesses include Oxy Low Carbon Ventures, which specializes in technologies and solutions that reduce emissions, and OxyChem, which develops “life-enhancing products.”
Occidental is considered a strong value play, because it churns out steady profits but still has a comparatively low stock price that has been stuck in a downward trend for most of the past year. Analysts at Zacks recently called Occidental’s stock price “undervalued” based on internal valuation metrics.
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Jan. 2 closing price: $22.10
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One-year return: -59.60%
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Average analyst share price target: $25.54
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Average 2025 earnings estimate: $3.05 a share
Sirius refers to itself as the “leading audio entertainment company” in North America, with subsidiaries that include its flagship SiriusXM subscription entertainment service, along with Pandora, a podcast network and various other businesses. SiriusXM alone reaches a combined monthly audience of 150 million listeners.
Berkshire Hathaway has been adding shares of Sirius XM to its portfolio since the third quarter of 2023. That’s the case even though the company recently forecast lower revenue and EBITDA in 2025. But because Sirius is a profitable company with a fairly cheap stock price, it presents a buying opportunity for both Buffett and other investors.
In a recent report, Zacks wrote that Sirius “may be undervalued” and could be a good pick for value investors. “The financial health and growth prospects of SIRI demonstrate its potential to outperform the market,” Zacks added.
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Jan. 2 closing price: $205.10
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One-year return: -0.42%
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Average analyst share price target: $212.78
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Average 2025 earnings estimate: $8.68 a share
VeriSign is a Reston, Virginia-based provider of internet infrastructure and domain name registry services. Buffett first acquired shares of the company in 2012 and kept adding shares over the next couple of years, but he didn’t build his position any further until December 2024, when he bought $45 million worth of VeriSign stock.
VeriSign sits in a very good position in the domain space, because it controls the registry rights for the .com and .net domains and recently renewed the former contract through 2030. It also churns out steady profits. But the company’s stock price has largely gone sideways over the last year, which makes it another alluring value play for investors like Buffett.
Editor’s note: Stock price and estimate numbers were sourced from Yahoo Finance and are accurate as of Jan. 2, 2025.
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This article originally appeared on GOBankingRates.com: 3 Undervalued Companies Warren Buffett Invested In During 2024: Should You Buy These Stocks?