Phillips 66 to Buy Back $3.3 Billion of Its Stock From Berkshire

Charles Munger

David A. Grogan | CNBC Charles Munger

Just before Berkshire's annual meeting in May, he acknowledged that his valuation had been flawed and that he'd begun to cut back on the investment.

Berkshire Hathaway Inc. (BRK-B) stock analysis is based on price earnings ratio (P/E) ratio.

Warren Buffett's Berkshire Hathaway Inc on Wednesday disclosed a new stake in generic drugmaker Teva Pharmaceutical Industries Ltd and said it bought more shares of Apple Inc, which surpassed Wells Fargo & Co as its largest common stock investment.

While past year was another tough one for the energy sector, Phillips 66 generated $3.6 billion in cash flow, up from $3 billion in 2016. These projects position Phillips 66 to generate even more cash flow this year, which is why the company authorized an additional $3 billion share repurchase program last October.

Berkshire at one time owned roughly 81 million IBM shares, for which it paid about $13.8 billion. Comparatively, 26.6% of Berkshire Hathaway shares are held by institutional investors.

Teva and Berkshire declined to comment. Its opening price on the last trading day was $196.02. The Israeli drugmaker took on a mountain of loans in 2016 to bulk up its copycat medicines business as profit margins declined in the USA, the world's most lucrative market for pharmaceutical companies.

Well, IBM rallied a bit during the fourth quarter of 2017, and apparently that was enough to send Berkshire heading for the exits.

Berkshire also almost completed its yearlong exit from IBM, selling more than 94% of what was left from an investment Buffett has admitted was not among his best. Berkshire owns 9.3% of the bank and Buffett also owns shares in his personal portfolio, and he has mentioned previously that some selling would be necessary. (BRK-B) escalated 1.46% and closed its last trading session at $198.89.

Berkshire unloaded 10 million shares of General Motors, which reduced its stake by 16%.

Cisco Systems Inc. (CSCO) - The seller of network routers, switches, software and services reported a fiscal second-quarter loss of $8.78 billion, or $1.78 per share, after reporting a profit in the same period a year earlier.

Aside from Berkshire Hathaway's tech stock dealings, the United States investment firm's decision to buy a stake in Teva came with a purchase of 18.9 million shares, which are worth in the region of $358 million. He has previously noted that the stock has disappointed him over the years. We won't know what he's buying now until mid-May, but many of its investors are probably hoping for more buying, especially after the recent market correction.

Latest News