Warren Buffett just bought 7 stocks. Here’s the best of the bunch.

Warren Buffett has been a net seller of stocks for seven consecutive quarters. He also built Berkshire Hathawaycash, cash equivalents and short-term investments to nearly $277 billion — the largest cash holding in the company’s history.

Did the legendary investor throw in the towel on the stock market? Not completely. Buffett just bought shares in seven stocks. I think one stands out as the best of the bunch.

Adding more

Buffett added to Berkshire’s existing positions in five stocks in the second quarter of 2024. I wasn’t surprised that Occidental Petroleum (OXY -0.38%) was one of them. Buffett is a big fan of Occidental and the company’s CEO, Vicki Hollub. The stock is Berkshire’s sixth-largest holding.

Berkshire’s purchase of over 1.1 million shares of Chubb (NYSE: CB) It wasn’t a shocker in T2 either. Buffett began buying the insurer last year without disclosing the identity of the shares. He has invested aggressively in Chubb in recent quarters. It is now the ninth largest position in Berkshire’s portfolio.

Buffett’s other three additions to existing positions in Q2 have a common denominator. He increased Berkshire’s stake in Liberty Media Corp Series A (NASDAQ: LSXMA) and Liberty Media Corp Series C (NASDAQ: LSXMK). Buffett also bought another 96.2 million shares Sirius XM Holdings (NASDAQ: SIRI)boosting Berkshire’s position in the satellite radio operator by more than 262%. Liberty Media owns more than 83% of Sirius XM’s outstanding shares.

New positions

The ultimate beauty (ULTA -0.04%) was the largest new position for Berkshire Hathaway in Q2. Buffett and his team bought more than 690,000 shares of the cosmetics retailer worth about $266 million at the end of the second quarter.

Ulta’s acquisition looks like a classic dip buy. Shares of Ulta are down about 20% year to date, and the decline was largely due to the company’s disappointing full-year guidance. Ulta CEO Dave Kimbell warned that consumer spending on cosmetics has slowed.

Buffett also initiated a new position in Heiko (HEY -0.71%) in Q2, buying more than 1 million shares of the aerospace and electronics company. Unlike Ulta Beauty, Heico posted strong earnings in 2024, with its stock up nearly 35%.

Business is booming for Heico. The company reported record revenue and earnings in its fiscal 2Q24 results announced in May. Acquisitions continue to be a key growth driver for Heico.

The best of the bunch

If you’re an income investor, you might be attracted to Sirius XM’s juicy forward dividend yield of 3.6%. The company’s dividend payout ratio of 31.5% is also low, indicating financial flexibility that could allow it to increase its dividend.

If you’re a value investor, the two Liberty Media stocks might be more to your liking. Both trade at a forward earnings multiple below 6.3. Analysts polled by LSEG also projects that Liberty Media will generate strong earnings growth over the next five years.

However, I think Occidental Petroleum is the best overall stock among Buffett’s Q2 buys. The stock is attractively valued with a forward earnings multiple of around 14.5. It offers a modest forward dividend yield of over 1.5%. CEO Hollub is predicting an oil supply shortage by the end of next year, and if he’s right, the stockpile could rise in the not-too-distant future.

Buffett praised Occidental’s pioneering work in developing carbon capture and storage technology. If the company is successful on this front, it could be a big winner for investors in the years to come.