Energy

As Warren Buffett Buys More Phillips 66, Is He Calling a Bottom?

Jon C. Ogg

Published: January 14, 2016 2:27 pm

Last Updated: January 13, 2020 3:01 pm

Warren Buffett is considered the greatest investor of the modern era. Some debate just how much this helps Berkshire Hathaway Inc. (NYSE: BRK-A) now that the company is so mature, but investors love tracking the Warren Buffett stock trades. Now it turns out the largest shareholder of Phillips 66 (NYSE: PSX), yes that is Buffett’s Berkshire Hathaway, has been accumulating more shares.

Buffett has been acquiring Phillips 66 shares for several days. The news was hardly going to matter when you see the market tanking lower and lower, but as soon as you get an up day like Thursday it seems to matter again.

A filing with the Securities and Exchange Commission showed that Buffett bought more Phillips 66 shares on January 11. This is a buying trend that was hardly noticed because of the market’s sell-off. Buffett’s new holdings showed that Berkshire Hathaway held some 66,584,032 common shares of Phillips 66.

What matters here and is actually substantial is that Buffett’s activity was for more than 5 million shares since the start of the year. All in all, this is close to $400 million worth of new stock.

At the end of last September, Berkshire Hathaway owned 61.486 million shares. That was already an 11.53% stake, but that stake has grown even larger with the latest purchases. Another issue worth noting is that Buffett bought shares over $79 and under $76 in the latest rounds of new purchases. That is close to the same level as when he was accumulating shares last August and September.

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60,482,032 of the total reported securities are owned by the following subsidiaries of Berkshire: National Indemnity Co. (52,863,649), National Fire & Marine Insurance Co. (1,163,000), National Liability & Fire Insurance Co. (1,266,000), Berkshire Hathaway Assurance Corp. (1,558,000), Berkshire Hathaway Homestate Insurance Co. (782,000), Berkshire Hathaway Specialty Insurance Co. (1,314,000) and Columbia Insurance Company (1,535,383). As Berkshire is in the chain of ownership of each of these subsidiaries, it may be deemed presently to both beneficially own and have a pecuniary interest in all shares of Common Stock presently owned by each of these subsidiaries. Warren E. Buffett, as the controlling stockholder of Berkshire, may be deemed presently to beneficially own, but only to the extent he has a pecuniary interest in, the shares of Common Stock presently owned by each such subsidiary.

A strong market gain was helping this position on Thursday, and Phillips 66 was last seen up 5.2% at $79.15. That has to be aided and abetted by Buffett’s stock buying. The stake in Phillips 66 is worth some $5.26 billion at the current market price. Phillips 66 has a consensus analyst target all the way up at $97.92, but its 52-week range is $58.68 to $94.12.