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Sally Jones
Sally Jones
Articles (580) 

Warren Buffett and Gurus Hold PSX after IPO

November 17, 2013 | About:

In the third quarter of 2013, numerous gurus were trading Phillips 66 (NYSE:PSX), around the same time that Phillips 66 Partners completed its initial public offering of Phillips 66 Partners LP common units, trading as PSXP on the NYSE. Phillips 66 will use the master limited partnership to grow its midstream segment, according to a company press release. As of Sept. 30, 2013, Phillips 66 had assets of $51 billion.

Phillips 66’s largest guru stakeholder is Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), holding 27,163,918 shares of PSX or 4.45% of shares outstanding. In the third quarter, the firm gained 15.7% on a holding that jumped from an average share price of $32.76 in the second quarter of 2012 to the third quarter 2013 price of $57.98.

Here’s a Phillips 66 update and a look at the very divided gurus in third quarter trading.

Phillips 66 (NYSE:PSX)

Up 39% over 12 months, Phillips 66 is an energy manufacturing and logistics company. The company has a market cap of $40.23 billion. Shares trade with a P/E of 12.00. The dividend yield is 1.98%. The current share price is around $67.10.

Headquartered in Houston, Phillip 66’s business segments include midstream, chemicals, refining, and marketing and specialties. The chemicals business is conducted through a 50% interest in Chevron Phillips Chemical Company LLC.

Company Earnings: The company reported third quarter 2013 financial results with earnings of $535 million, down from last year’s same quarter at $1.6 billion. Earnings of $0.87 per share were posted for the third quarter. Phillips 66 had $1.9 billion in operating cash flow for the reporting quarter, and returned $863 million of capital shareholders through dividends and share repurchases. The company announced a quarterly dividend increase of 25%. Other third quarter highlights included the completion of its initial public offering of Phillips 66 Partners LP, trading as PSXP.

Greg Garland, chairman and CEO of Phillips 66, commented on his company’s quarter in a company press release: “Weaker refining margins had a significant impact on our earnings. Chemicals posted strong earnings as a result of solid utilization rates and good margins…We're reinvesting in our businesses while increasing shareholder distributions. We continue to capitalize on the rise of North American energy production, focusing investment in the rapidly growing midstream and chemicals sectors. This quarter, we returned more than $800 million of capital to our shareholders through dividends and share repurchases. Earlier this month, we completed our initial $2 billion share repurchase program, began share repurchases under our additional $1 billion program and announced a 25 percent increase in our dividend.”

Guru Action: As of Sept. 30, 2013, Warren Buffett’s Berkshire Hathaway Inc. gained 15.7% on 27,163,918 shares at an average price of $57.98. The firm gained 104.8% on those shares as a new buy in the second quarter of 2012, buying at an average price of $32.76 per share.

As of Sept. 30, 2013, Jim Simons is one of four gurus making a new buy of PSX. He bought 730,900 shares at an average price of $57.98, for a gain of 15.7%.

George Soros is one of four gurus selling out PSX in the third quarter. As of Sept. 30, 2013, he sold out PSX, a stock he had held for only two quarters. In the third quarter, he sold 147,600 shares at an average price of $57.98, for a gain of 15.7%. He gained 6.8% on 147,600 shares as a new buy at an average price of $62.83 in the second quarter of 2013.

In the same quarter, major stakeholder James Barrow reduced his PSX position by 3.54%, selling 630,517 shares at an average price of $57.98, for a gain of 15.7%. He also gained 104% on 19,287,699 shares bought at an average price of $32.92 over his trading history. Selling, he gained 22% on 2,081,974 shares sold at an average price of $54.85 per share. Barrow’s remaining shares are 17,205,725 or 2.82% of shares outstanding.

Find more active guru trading in third quarter of 2013 and recent insider trading.

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

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GuruFocus has detected 4 Warning Signs with Phillips 66 $PSX.
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