Berkshire Hathaway Takes Larger Stake in Phillips 66

31 Aug 2015 | Author: | No comments yet »

Berkshire Hathaway Builds Stake in Refiner Phillips 66.

In late 2013, the Omaha, Neb., company agreed to trade about $1.4 billion of its Phillips 66 stock for one of the refiner’s businesses that makes additives to help crude oil flow through pipelines. Warren Buffett’s Berkshire Hathaway disclosed a $4.5 billion stake in Phillips 66, the Houston-based oil refiner, as the billionaire investor’s company increases its bet on the energy industry.

A regulatory filing says Berkshire Hathaway Inc. has accumulated about 58 million shares, which amounts to more than 10 percent of the Houston company’s stock. In an August. 14 SEC filing detailing its U.S. stock holdings, Berkshire did not mention Phillips 66, after having previously reported a 7.5 million-share stake as of March 31, but said it disclosed some information confidentially to the regulator. The latest wager comes amid a slump in crude prices, driven by concerns that a supply glut will persist. “Berkshire’s made a clear statement about how they view the oil business,” said Cliff Gallant, an analyst at Nomura Holdings Inc. “They seem to be taking the long view that demand for fuel is going to come back.” Concern over China’s growth roiled global financial markets earlier this week and created a buying opportunity for Berkshire. Buffett can quietly buy a large amount of stock without worrying about investors piggybacking on what they may think to be the famed investor’s stamp of approval. The Securities and Exchange Commission sometimes allows companies to withhold information from the public to limit copycat investing while a firm is building or cutting a position.

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