This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Stocks to Buy to Be Like Buffett

Stocks in this article: PSXNOVDVAWFCBK

Phillips 66

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Topping the new buys list last quarter was Phillips 66 (PSX), the independent refiner and petrochemical firm that began trading on the NYSE earlier this year after splitting off from ConocoPhillips (COP). The split turned PSX into the downstream arm of COP, focusing on the part of the process that happens after the oil and gas come out of the ground.

Berkshire piled up on shares of PSX last quarter, picking up 27.16 million shares for a 4.2% stake in the firm that's worth nearly $1 billion right now.

>>10 Century-Old Blue-Chips Still Earning Their Keep

Clearly, Buffett likes Phillips 66.

That may come as a surprise though. Downstream energy businesses typically come with lower margins than successful E&P businesses do, meaning that PSX is the low-return side of the operation. But don't think that Phillips 66 is merely a refiner and gas station chain. Phillips also owns a lucrative chemicals business and more than 62,000 miles of pipelines. If the firm decides to, it could easily push the nat gas unit into a tax-advantaged structure (think MLP) for investors' benefit.

Ultimately, there's more to PSX than meets the eye. That fact that it was split off from a profitable supermajor doesn't hurt either. The firm is well-capitalized and boasts a portfolio of refinery properties that have big structural advantages over competitors. With shares within a buck of new highs, investors had better look sooner rather than later.

2 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,677.90 +216.58 1.32%
S&P 500 1,950.82 +23.71 1.23%
NASDAQ 4,452.7920 +69.9450 1.60%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs