Buffett Just Can’t Get Enough of Phillips 66 (PSX); Plus Two Bullish Moves from Billionaire Glenn Krevlin

Most investors are currently wondering how much lower the stock market can go and how much uglier things can get. Those hedge fund managers and other investors who were anticipating another stock market correction after enduring the turbulent third quarter will most probably benefit the most from the fast-declining valuations of U.S companies. Valuations are becoming more attractive day after day and those who had hedged enough before the recent downfall will benefit the most from the abundant pool of opportunities. Leaving the discussion about volatility and concerns aside for a moment, let’s discuss several filings submitted with the SEC by two widely-known money managers. Specifically, a filing submitted by Warren Buffett and two separate 13Gs filed by Glenn J. Krevlin will be closely examined and discussed in this article.

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As already stated in our previous articles, Berkshire Hathaway just keeps buying shares of Phillips 66 (NYSE:PSX) with each passing day. According to a Form 4 filing, billionaire Warren Buffett purchased 861,470 shares on Tuesday at prices that ranged from $76.00 to $78.38 per share, boosting his overall holding to nearly 67.45 million shares. As covered in several articles earlier this week, Berkshire Hathaway bought 1.65 million shares last Thursday, 1.74 million shares last Friday, and 902,442 shares on Monday. The shares of the oil refiner have plummeted by 16% since early December, but they are up by 21% over the past year. The recent slump in Phillips 66 (NYSE:PSX)’s share price has created an attractive entry point for Buffett and other investors. Refining margins have been increasing over the past several months, as the average market crude oil price declined by more than the average market gasoline price. The increased refining margins have a positive effect on Phillips 66’s bottom-line results, but analysts anticipate falling demand for the company’s output, which could put downward pressure on both its top- and bottom-line figures. Nonetheless, the stock trades at a forward price-to-earnings ratio of only 10.82, which compares well with the 15.75 ratio for the S&P 500 benchmark. Aside from Buffett, D.E. Shaw & Co. L.P., founded by David E. Shaw, also holds a sizable stake in Phillips 66 (NYSE:PSX), owning 9.94 million shares as of September 30.

Let’s head to the next page of this article, where we reveal two freshly-made moves reported by Glenhill Advisors.

In a Schedule 13G filing, Glenn Krevlin’s Glenhill Advisors LLC reported owning 6.96 million shares of Houghton Mifflin Harcourt Co (NASDAQ:HMHC), which account for 5.2% of the company’s outstanding shares. This compares with the position of 3.26 million shares reported by Glenhill through its 13F filing for the September quarter. The shares of the global learning company that offers education solutions to more than 50 million students have been on a slide since early August and are down by 12% over the past year. The digitalization of educational content has forced the company to change its strategy in recent years, so Houghton Mifflin Harcourt Co (NASDAQ:HMHC) has shifted its focus to digital and online learning products to capitalize on the changing trends. The company reported net sales of $1.12 billion for the nine months that ended September 30, up from $1.11 billion reported for the same period of the prior year. However, the company’s net loss for the first nine months of 2015 widened year-over-year to $36.60 million from $27.76 million. The hedge fund sentiment towards the stock was positive during the third quarter, with the number of money managers tracked by Insider Monkey that were invested in the company increasing to 37 from 34. Those 37 funds amassed 37.40% of the company’s outstanding shares. Marc Lasry’s Avenue Capital holds a 4.29 million-share position in Houghton Mifflin Harcourt Co (NASDAQ:HMHC) as of the end of the third quarter.

According to a separate 13G filing, Glenhill Advisors currently owns 8.15 million shares of Lionbridge Technologies Inc. (NASDAQ:LIOX), which make up 12.6% of the company’s common stock. The investment firm owned 7.65 million shares on September 30, as revealed by the fund’s 13F filing for the September quarter. It appears that this move makes a lot of sense on the surface, if considering the company’s revenue growth and valuation metrics. Lionbridge Technologies Inc. (NASDAQ:LIOX) offers translation, online marketing, content management and application testing solutions and has Microsoft Corporation (NASDAQ:MSFT) as one of its key clients. The tech giant has been engaged in a reorganization plan throughout the last several quarters, which led to lower project volume and related services revenue for Lionbridge and other suppliers. Even so, Lionbridge Technologies Inc. (NASDAQ:LIOX) reported revenue of $419.2 million for the nine months that ended September 30, compared to $370.9 million reported for the same period of the prior year. It should also be mentioned that the stock trades at an attractive P/E ratio of 10.14, which points to strong upside in the upcoming quarters (assuming analysts’ earnings estimates are reasonable). 16 hedge funds from our system had positions in the company at the end of the third quarter, accumulating 18.20% of its shares. Jim Simons’ Renaissance Technologies owns 522,300 shares of Lionbridge Technologies Inc. (NASDAQ:LIOX) as of September 30.

Disclosure: None