NEW YORK (TheStreet) -- Shares of Phillips 66 (PSX) - Get Phillips 66 Report are rising by 2.29% to $79 in pre-market trading on Monday morning, after Warren Buffett's Berkshire Hathaway (BRK.A) - Get BRK.A Report (BRK.B) - Get Berkshire Hathaway Inc. Class B Report disclosed a roughly 10.8% stake in the manufacturing and logistics company.
Berkshire Hathaway has taken a $4.48 billion or 57.98 million share stake in the oil refiner, Reuters reports, as the company rebuild its stake in Phillips 66.
Previously, Berkshire Hathaway held a large percent of Phillips 66 but reduced its hold by almost two-thirds in February of last year, when it traded $1.35 billion of shares for a chemical business it then made apart of its Lubrizol unit.
Since then crude oil prices have more than halved, however Philips' share price has declined by less than 1%, Reuters added.
Phillips 66 is a Houston-based energy company that operates in four segments: midstream, chemicals, refining and marketing.
Separately, TheStreet Ratings team rates PHILLIPS 66 as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate PHILLIPS 66 (PSX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 17.3% when compared to the same quarter one year prior, going from $863.00 million to $1,012.00 million.
- The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.16, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 71.92% to $1,427.00 million when compared to the same quarter last year. In addition, PHILLIPS 66 has also vastly surpassed the industry average cash flow growth rate of -20.29%.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, PHILLIPS 66 has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: PSX Ratings Report