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Phillips 66’s Institutional Holdings: Berkshire Trimmed Stake


Nov. 15 2019, Updated 8:00 a.m. ET

Phillips 66’s (PSX) institutional holdings have shown a mixed trend in the third quarter. Based on the available filings data, while some prominent institutions like Berkshire Hathaway and Fidelity have reduced their holdings in the stock, others like Vanguard and State Street have raised their stakes in the stock.

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Changes in Phillips 66’s institutional holdings

Warren Buffett’s Berkshire Hathaway (BRK.A) (BRK.B) (BRK-B) reduced its stake in Phillips 66 stock by almost 6.7% in the third quarter. Buffett has been offloading the stock since the first quarter of 2018. Berkshire Hathaway has owned the stock since ConocoPhillips split in 2012. Berkshire Hathaway continued the trend and booked some more profits in the stock in the third quarter. The stock rose about 10% in the third quarter.

Fidelity Management and Research Company also sold Phillips 66 shares in the third quarter.

However, Vanguard Group, State Street Global Advisors, and BlackRock Institutional Trust Company have raised their holdings in the stock. Vanguard has increased its stake in Phillips 66 by about 4.6%, while State Street raised its holdings by nearly 4.9%. Wells Fargo Advisors and Geode Capital Management have also raised their stakes in the stock.

So, most of the institutional holdings in Phillips 66 have risen in the third quarter.

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Will earnings impact institutional holdings in Q4?

Above, we looked at some of the vital changes in Phillips 66’s institutional holdings in the third quarter. In the fourth quarter, the company will take positions based on its latest earnings, stock performance, business conditions, and outlook.

Phillips 66 had a decent performance in the third quarter. Although the company’s overall earnings fell 3% due to weaker refining earnings, it saw a rise in its midstream, marketing, and chemicals earnings.

The company is building a diversified downstream model that doesn’t solely depend on refining earnings. While refining earnings can surge due to healthy refining conditions, they can fall during weaker margin conditions.

In the quarter, Phillips 66 saw weak refining earnings led by a 16% slump in its refining margin. However, more fuel sales volumes boosted the company’s marketing earnings. Better transportation and NGL earnings supported the company’s midstream profits. To learn more, read Phillips 66 Earnings Beat Estimate, Stock Rose 4%.

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Shareholder returns

Phillips 66 has continued to provide shareholder returns. The company paid $402 million in dividends and bought back $439 million worth of shares in the third quarter. Recently, the company declared a $3 billion buyback program, which takes its total authorization to $15 billion since 2012.

Phillips 66 has returned a whopping $24 billion to shareholders through dividends and buybacks since 2012. The company has also reduced its outstanding shares by 32% during the same period. The shareholder returns might have kept investors positive on the stock. Notably, the company intends to create value for shareholders through disciplined capital investment.

In the third-quarter earnings conference call, Phillips 66’s chairman and CEO, Greg C. Garland, said, “Over the long-term, we will reinvest 60% of our operating cash flow back into the business and return 40% to our shareholders through dividends and share repurchases. We are dedicated to a secure, competitive and growing dividend. We buy back our shares when they trade below intrinsic value, and we are buying shares today.”

Phillips 66 stock will impact institutional holdings in Q4

In the current quarter, Phillips 66 stock has risen 17%, which could impact the institutional holdings in the fourth quarter. Institutions could book some profits in the stock in the current quarter.

Most refiners have been on an upward spree. Refiners have been rising in the quarter due to higher-than-expected earnings, rallying equity markets, and changing refining conditions.

Valero Energy (VLO) and PBF Energy (PBF) have also risen 18% and 24%, respectively, sequentially. Meanwhile, Marathon Petroleum (MPC) has increased 6% during the same period. Read Are Valero, Marathon, and Phillips 66 Beating SPY? to learn more.


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