2 cheap Warren Buffet stocks not to ignore in 2025

Warren Buffett, CEO of Berkshire Hathaway (NYSE: BRK.A), is celebrated for his ability to pick stocks with enduring growth potential. 

His portfolio is filled with stocks offering competitive advantages, making them ideal long-term investments. With his portfolio consistently outperforming the market, adopting Buffett’s picks can provide any portfolio with a solid foundation.

Among Buffett’s holdings, two undervalued stocks, Occidental Petroleum (NYSE: OXY) and Kraft Heinz (NASDAQ: KHC), stand out as strategic buys for 2025.

Occidental Petroleum (NYSE: OXY)

Occidental Petroleum is Buffett’s second-largest energy holding and sixth-largest position overall, highlighting his confidence in the stock’s long-term potential. 

Currently trading at $51.61, OXY is near its 2.5-year lows, offering an attractive entry point.

Berkshire Hathaway holds 255.28 million shares valued at around $16 billion, representing 5.75% of Berkshire’s portfolio.

Occidental’s trailing P/E ratio of 13.33 and forward P/E ratio of 17.41 highlight its undervalued status within the energy sector. Over the past year, OXY’s price has declined by 17.51%, presenting an entry point for investors looking to tap into the energy market.

Moreover, Occidental consistently exceeded production targets where it surpassed its forecast by producing an additional 6,000 barrels per day in the second quarter.

The recent $12 billion acquisition of CrownRock, a prominent shale producer, further strengthens Occidental’s capacity to benefit from a potential rebound in oil prices.

Additionally, Occidental’s investment in carbon capture technology demonstrates its commitment to sustainable energy, aligning with global environmental goals and regulatory demands. 

With its focus on production growth and green initiatives, Occidental is well-positioned for long-term value creation.

Kraft Heinz (NASDAQ: KHC)

Kraft Heinz has long been a core holding in Buffett’s portfolio, with 325.63 million shares 

valued at $10.49 billion, making up 3.75% of his investments. 

Currently trading at $34.74, Kraft Heinz has faced a challenging three years, delivering a total return of only 8.3%, significantly underperforming the S&P 500’s 38% total return over the same period.

Kraft Heinz’s forward PE ratio of 11.29 and PEG ratio of 3.69 indicate it is undervalued within the consumer staples sector, especially compared to competitors. 

While KHC is trading well below its initial 2015 opening price of $71 and its 2017 peak, the current valuation reflects a potential turnaround opportunity for investors.

Kraft Heinz’s stock has been weighed down by factors such as multiple contractions, concerns over the impact of GLP-1 weight loss drugs on consumer demand, and weak business performance.

Despite these headwinds, Kraft Heinz still generated $12.9 billion in revenue in the first half of 2024, reflecting its enduring brand appeal with names like Philadelphia, Lunchables, and Oscar Mayer.

Additionally, the company’s 4.61% dividend yield offers a steady income stream, making it attractive for dividend-focused investors.

Although general market trends impact these stocks, their inclusion in Warren Buffett’s portfolio is a strong endorsement of their long-term potential.

Buffett’s proven investment acumen suggests these equities are undervalued opportunities, making them ideal for investors looking to emulate his successful, value-driven strategy.