Should You Buy Phillips 66 (PSX)?

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Phillips 66 (NYSE:PSX) has seen an increase in hedge fund sentiment recently.

To the average investor, there are a multitude of indicators shareholders can use to watch their holdings. Some of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top money managers can outclass the market by a superb amount (see just how much).

Phillips 66 (PSX)Just as integral, optimistic insider trading activity is a second way to parse down the stock market universe. There are lots of reasons for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this tactic if piggybackers know what to do (learn more here).

Keeping this in mind, let’s take a glance at the key action surrounding Phillips 66 (NYSE:PSX).

Hedge fund activity in Phillips 66 (NYSE:PSX)

At the end of the first quarter, a total of 48 of the hedge funds we track were bullish in this stock, a change of 7% from the first quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes significantly.

When looking at the hedgies we track, Warren Buffett’s Berkshire Hathaway had the most valuable position in Phillips 66 (NYSE:PSX), worth close to $1.9007 billion, accounting for 2.2% of its total 13F portfolio. Sitting at the No. 2 spot is East Side Capital (RR Partners), managed by Steven Richman, which held a $245.3 million position; the fund has 12.3% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Bill Miller’s Legg Mason Capital Management and D. E. Shaw’s D E Shaw.

As aggregate interest increased, some big names have been driving this bullishness. OZ Management, managed by Daniel S. Och, established the most outsized position in Phillips 66 (NYSE:PSX). OZ Management had 91.1 million invested in the company at the end of the quarter. Doug Silverman and Alexander Klabin’s Senator Investment Group also initiated a $84 million position during the quarter. The other funds with new positions in the stock are Tom Sandell’s Sandell Asset Management, Larry Robbins’s Glenview Capital, and T Boone Pickens’s BP Capital.

How have insiders been trading Phillips 66 (NYSE:PSX)?

Insider buying is particularly usable when the company in focus has experienced transactions within the past half-year. Over the last 180-day time period, Phillips 66 (NYSE:PSX) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Phillips 66 (NYSE:PSX). These stocks are Marathon Oil Corporation (NYSE:MRO), Hess Corp. (NYSE:HES), Valero Energy Corporation (NYSE:VLO), Marathon Petroleum Corp (NYSE:MPC), and Imperial Oil Limited (USA) (NYSEAMEX:IMO). All of these stocks are in the oil & gas refining & marketing industry and their market caps match PSX’s market cap.

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