Berkshire Hathaway continues to believe in refiner Phillips 66 (PSX) and increased its ownership stake in the second quarter.
Berkshire increased its 75.55 million shares position to 78.782 million shares as of June 30, 2016.
Berkshire and Phillips 66
In early 2014, Berkshire swapped a large portion of its previous Phillips 66 position for the Houston-based company’s chemical business unit, which was added to Berkshire’s specialty chemical maker Lubrizol.
“We were able to do that on a tax-advantage basis. We didn’t trade them because we didn’t like the stock,” Warren Buffett commented at the time on CNBC’s Squawk Alley. “I had always intended on coming back in, assuming that the price was right.”
In August 2015, Berkshire Hathaway revealed that it again owned more than ten-percent of Phillips 66.
After hitting a high of $94.12 in November 2015, the stock was at $78.05 at the closing bell on August 19, 2016.
About Phillips 66
Phillips 66 was spun-off of ConocoPhillips in May 2012, and its refining and petrochemical business has been mostly immune to the downward pressure on oil prices, as the demand for refined products, including gasoline, diesel and aviation fuel remains strong. Phillips 66 also transports crude oil, refined products, natural gas and natural gas liquids (NGL). It gathers, processes and markets natural gas and NGL to power businesses, heat homes and provide feedstock to the petrochemical industry.
© 2016 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.