Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway (BRK.A, Financial)(BRK.B, Financial) empire purchased a relatively small amount of shares of their largest energy position Phillips 66 (PSX, Financial) as its share price declined this week.
According to Real Time Picks, Berkshire added 35,781 shares of the company Jan. 4 at weighted average price of $79.47, and 12,491 shares Jan. 5 at a weighted average price of $80.18. The company’s price has declined 6.9% since the beginning of the year and traded around $76.88 Thursday morning, with a 52-week range of $57.33 and $94.12.
The purchases increased Buffett’s position a modest 0.08% to 61,535,198 shares, from 61,486,926 reported at the end of the third quarter. This gives him a stake worth slightly less than 12% of the company.
Buffett has had a position in Phillips 66 since the second quarter 2012, but added more than 50 million shares in the second and third quarters of 2015.
Phillips 66 is a spin-off of ConocoPhillips (COP, Financial) downstream and midstream assets that began trading in April 2012. The company announces fourth quarter operating results Jan. 29. For the third quarter, it reported earnings of $1.58 billion, increased from $1.18 billion the third quarter last year. Free cash flow totaled $445 million, compared to a cash flow loss of $254 million. Phillips 66 ended the quarter with $4.8 billion in cash on its balance sheet and debt of $9.0 billion.
The company’s strategy continued to be to grow its higher-valued midstream and chemicals businesses, enhance refining returns and return capital to shareholders. It gave $673 million to shareholders in the third quarter, repurchasing 4.7 million shares for $373 million and paying out $300 million in dividends.
The company has significant share buyback plan. Last year it boosted its repurchase program by $2 billion, giving it a total authorization of $3 billion.
Since July 2012, Phillips has repurchased 88 million shares at a cost of $6 billion and increased its quarterly dividend 180% to 56 cents per share.
The company has a P/E of 8.98, P/B of 1.76 and P/S of 0.38.
GuruFocus Real Time Picks is a Premium feature. Not a Premium Member of GuruFocus? Try it free for 7 days.
