Omaha’s oracle has set its sights on Chevron and Verizon.
Berkshire Hathaway, led by renowned investor Warren Buffett, announced significant stakes for these two old players earlier this week.
CNBC’s “trading nation” asked two traders if they would follow suit and put money into those two shares.
“It’s about the challenge that Buffett has now in raising capital. It’s such a big amount that he has to carry it out, so he has to really find these big stable names … I’m not the typical American franchise that he has. buy see it doing, “Quint Tatro, president of Joule Financial, said Wednesday.
Tatro said that while Verizon looks somewhat attractive as a dividend game, it prefers oil giant Chevron.
“This is a major integrated oil name, one of the best balance sheet names, 25% debt to equity, which is very, very good in that space,” he said. “Not his typical type of name, but we’d probably favor Chevron over Verizon.”
Berkshire Hathaway announced a $ 8.6 billion stake in Verizon and a $ 4.1 billion stake in Chevron. Both outperformed the market this week.
Todd Gordon, founder of TradingAnalysis.com, owns Chevron and Verizon, noting that both are high-yielding. Verizon has a dividend yield of 4.4% and Chevron close to 5.5%.
Chevron, in particular, is gaining momentum due to higher oil prices, driven by rising demand and declining energy in Texas during a winter storm. The stock rose by more than 12% this month, while crude oil rose by 17%. Gordon sets up a stock transaction.
“If you want to make a spread option, here’s a little idea … maybe make a 95-105 call if you want to do that in June, because the markets are reducing the summer driving season and reopening,” he said.
A $ 105 target implies a 10% increase for Chevron compared to its current levels.
Disclosure: Gordon holds CVX and VZ in its portfolio.
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