Shares of Phillips 66 (PSX) got an injection of confidence last week after investors learned via a filing with the Securities and Exchange Commission (SEC) that Warren Buffett's Berkshire Hathaway Inc. (BRK.A) (BRK.B) had increased its position in the company.
Buffett's Betting Big on Refiners
Berkshire Hathaway, which has been actively buying shares of oil refiners, disclosed on Wednesday it had acquired 537,968 additional Phillips shares for transaction value of $43.1 million. All told, during the week, Berkshire acquired almost 643,000 shares of the company, valued at $64 million. As it stands, Berkshire now owns 15% of Phillips, totaling more than 76 million shares and marking a 23% rise from the end of 2015 when it owned 61.5 million shares. (See also: Is Buffett's Bet on Oil Right for You?)
The acquisitions arrived ahead of weekly oil inventories reports and Thursday's disappointing news from OPEC (Organization of Petroleum Exporting Countries) member countries, who couldn't strike an agreement to put a cap on oil production at a meeting in Vienna. The news sent the U.S. Crude prices falling some 1%.
Phillips 66 shares closed on Friday at $80.13, marking a rise of 0.11% for the week, compared to the prior week's close of $80.63. The stock would have likely made significantly more gains had it not been for the decline in oil. Crude oil (West Texas Intermediate) closed Friday at $48.90, down 1.12%, while Brent crude was unchanged, closing at $49.64, according to CNBC.com. Prior to this week, oil prices had rallied some 80% from the 12-year low reached in January. (See also: Berkshire Hathaway Buys 26.5 Million Shares of KMI.)
The Bottom Line
PSX stock has declined 2.04% so far in 2016, compared with a 2.70% rise in the S&P 500 (SPX) index. The shares have risen 1.26% over the past twelve months, while the S&P 500 index has declined 0.71%. PSX stock has a consensus hold rating and an average analyst 12-month price target of $90, implying a 12.32% rise from current levels.