Warren Buffett cut his apple stake. Here’s what he bought instead.

It finally happened. This year, Warren Buffett and Berkshire Hathaway (BRK.B -1.18%) (BRK.A -0.99%) began selling significant portions of his monster Apple stake. According to its latest 13-F filing with the Securities and Exchange Commission (SEC), Berkshire Hathaway cut its Apple investment by about half in the second quarter. Those shares were worth about $80 billion, based on Apple’s current share price.

Berkshire Hathaway now has an estimated $300 billion in cash and equivalents on its balance sheet, a number that has been growing every quarter for some time.

Much of the proceeds of that sale of Apple shares are now in US cash and Treasuries as Buffett waits for the next big opportunity that beckons him. However, the conglomerate made some stock purchases in the second quarter. Here are two interesting stocks that Berkshire Hathaway bought this summer that you should consider for your portfolio.

Occidental Petroleum: US oil and natural gas bets

One of Buffett’s favorite companies — and a stock he seems to be buying more of every quarter right now — is Occidental Petroleum (OXY -3.18%). It is one of the largest oil and natural gas companies in the US and last quarter posted the highest production in four years (measured in barrels of oil equivalent per day) from its various operations.

This led to free cash flow generation of $1.3 billion in the quarter. To further reinvest for growth, the company just bought CrownRock for $12 billion, a deal that added new acreage for production in the Midland Basin. The new assets will help boost free cash flow generation and should help Occidental Petroleum strengthen its position in the United States.

Buffett now owns about 27 percent of Occidental Petroleum, a big bet on continued U.S. demand for natural gas. This could prove to be a particularly significant move as further growth in electricity demand is based on the artificial intelligence (AI) and cloud computing markets. However, right now, natural gas prices are falling. While this will be a problem for Occidental Petroleum in the short term (and helps explain why the stock is down 21% from its 52-week high), it could provide a buying opportunity for investors focused on long term.

Occidental Petroleum currently trades at a price-to-earnings (P/E) ratio of 13.4, even with low natural gas prices. If you’re like Buffett and believe in the sustainability of demand for natural gas, now might be a great time to add Occidental Petroleum stock to your portfolio.

OXY PE Report Data by YCharts

Ulta Beauty: A Bargain Beauty Retailer?

The ultimate beauty (ULTA 1.05%) it’s a new position for Buffett. Berkshire Hathaway added the stock to its portfolio in the second quarter after the stock fell more than 40% from its recent high.

Ulta Beauty is struggling as it emerges from a beauty product boom tied to the COVID-19 pandemic. Comparable sales fell 1.2 percent in the second quarter, compared with 8 percent growth in the year-ago period. Customers are spending less on beauty products and visiting Ulta stores less often. And given that the chain has nearly 1,500 stores in operation, investors are likely concerned that it is reaching market saturation.

Taking a longer view, it’s clear that Ulta Beauty has been adept at growing its earnings. Operating income is up 295% over the past 10 years, while shares outstanding are down 26.8%. The company is constantly buying back shares to reduce its outstanding shares, which is good news for remaining shareholders.

Buffett and his team at Berkshire Hathaway likely believe that Ulta Beauty is a quality retailer facing near-term problems. It currently trades at a low P/E ratio of 14.4 and buys back a ton of shares. For those confident in the Ulta Beauty brand, now could be a great time to follow Buffett and take a position in the company.