Oakmark Funds, advised by Harris Associates, released its “Oakmark Select Fund” fourth quarter 2023 investor letter. A copy of the same can be downloaded here. The fund returned 14.61% in the fourth quarter compared to an 11.69 % return for the S&P 500 Index. For the calendar year, the fund returned 43.00% compared to 26.29% for the benchmark. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
In its Q4 2023 investor letter, Oakmark Select Fund featured stocks such as Phillips 66 (NYSE:PSX). Headquartered in Houston, Texas, Phillips 66 (NYSE:PSX) is an energy manufacturing and logistics company. On January 8, 2024, Phillips 66 (NYSE:PSX) stock closed at $133.85 per share. One-month return of Phillips 66 (NYSE:PSX) was 6.89%, and its shares gained 31.78% of their value over the last 52 weeks. Phillips 66 (NYSE:PSX) has a market capitalization of $58.888 billion.
In its fourth quarter 2023 investor letter, Oakmark Select Fund stated the following regarding Phillips 66 (NYSE:PSX):
“Phillips 66 (NYSE:PSX) is an integrated downstream energy company that operates refineries, pipelines, chemical manufacturing plants and retail gas stations. Like most U.S.-based oil refiners, Phillips 66 is currently earning abnormally high profit margins thanks to a tight market for refined products, like gasoline, diesel and jet fuel. Many investors worry that these elevated margins are unsustainable and, therefore, they assign low P/E multiples to the refiners. Indeed, Phillips 66 and its peers Valero and Marathon Petroleum all trade for around 9x next year’s earnings. Unlike the other refiners, however, the majority of value at Phillips 66 comes from its non-refining segments, which provide a more stable base of cash flow. We believe this business mix and management’s cost-cutting and capital-return priorities will bolster earnings per share, even if refining margins return to historical levels. As a result, we believe we are paying a single-digit multiple of normalized earnings for Phillips 66 today. We see this as an attractive price for a solid business.”
A engineer overseeing a exposed network of pipelines connected to tanks at an oil refinery.
Phillips 66 (NYSE:PSX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held Phillips 66 (NYSE:PSX) at the end of third quarter which was 36 in the previous quarter.
We discussed Phillips 66 (NYSE:PSX) in another article and shared the list of top largest US companies by 2023 revenue. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
