Phillips 66 (PSX)

[Timothy Smith]

Warren Buffett’s commitment to PSX might look like a case of buying at the top, as factors such as wide spreads between prices for U.S. crude and refined products on global markets have made the past several quarters some of the most profitable ever for U.S. refiners and stocks of refining companies have enjoyed a strong YTD rally.

But Heard On The Street's Spencer Jakab says many non-refining businesses within PSX, such as its midstream unit, are substantial and stand to benefit if beaten-down oil and natural gas prices rebound, and that Buffett actually is making his own bet on energy infrastructure.

Berkshire’s stake is too large to be a simple portfolio move and looks more like a strategic step, Jakab writes, perhaps a shares-for-assets swap for assets complementary to BRK’s existing infrastructure that offer steady, utility-like returns, rather than the refining units that are all the rage.