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Refining Sector in 2Q17: TSO Outperforms MPC, VLO, and PSX

PART:
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Part 8
Refining Sector in 2Q17: TSO Outperforms MPC, VLO, and PSX PART 8 OF 12

Institutional Ownership in MPC, TSO, VLO, and PSX: Who’s Buying What?

Changes in institutional ownership in MPC, TSO, VLO, and PSX

Institutional ownership shows the percentage of a company’s stock owned by institutions like mutual funds, pension funds, hedge funds, banks, and insurance companies. The level of this measure suggests the confidence level that these sophisticated market participants have in a stock. Increasing institutional ownership typically indicates a favorable opinion about a stock.

Institutional ownership in Marathon Petroleum (MPC), Valero Energy (VLO), and Phillips 66 (PSX) rose while that in Tesoro (TSO) fell in June 2017 over December 2016. 

Institutional ownership in MPC, VLO, and PSX rose ~2%, ~3%, and ~2%, respectively, over December 2016 to 82%, 83%, and 71%, respectively, in June 2017. However, TSO saw a 19% fall in its institutional ownership to 69% during the same period.

Institutional Ownership in MPC, TSO, VLO, and PSX: Who’s Buying What?

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The steep fall in institutional ownership in TSO is due to the completion of the Western Refining (or WNR) acquisition. The acquisition resulted in changes in Tesoro’s equity as WNR shareholders were given an option to elect for a 0.435 share of Tesoro or $37.30 in cash for a share of WNR, subject to a ceiling of 10% of equity consideration. 

The deal resulted in changes in the number of outstanding shares of Tesoro. This change led to changes in institutional ownership, which are presented as a percentage of outstanding shares of Tesoro.

Institutional ownership in MPC

Institutions with significant ownership in MPC include The Vanguard Group, BlackRock Institutional Trust, State Street Global Advisors, and Boston Partners. In the past six months, these four institutions have increased their total holdings in MPC.

The largest buyer of Marathon Petroleum stock in the past six months has been JANA Partners, and the biggest seller has been Iridian Asset Management.

Institutional ownership in TSO

The Vanguard Group, State Street Global Advisors, Franklin Mountain Investments, and BlackRock Institutional Trust have vast institutional holdings in Tesoro. The Vanguard Group and Franklin Mountain Investments have bought more shares of TSO in the past six months. 

However, State Street Global Advisors and BlackRock Institutional Trust have partially sold Tesoro stock.

Institutional ownership in VLO

Institutions with large ownership levels in VLO include The Vanguard Group, BlackRock Institutional Trust, State Street Global Advisors, and Columbia Threadneedle Investments. The Vanguard Group and BlackRock Institutional Trust have increased their total holdings in VLO in the past six months. The remaining two institutions have lowered their total holdings in VLO in the past six months.

AQR Capital Management LLC has sold a large number of VLO shares in the past six months. However, BlackRock Institutional Trust has bought VLO shares in the past six months.

Institutional ownership in PSX

The Vanguard Group, Berkshire Hathaway, State Street Global Advisors, and BlackRock Institutional Trust have vast institutional holdings in Phillips 66 (PSX). Of these, Berkshire Hathaway’s holdings in PSX have remained constant in the past six months. The remaining three institutions have seen a rise in their number of shares of PSX in the past six months.

The largest buyer of Phillips 66 (PSX) stock in the past six months has been Oppenheimer Funds, and the largest seller has been Boston Partners.

In the next part, we’ll evaluate whether there is a change in the short interest of refining stocks.

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