As the market keeps posting new all-time highs, it has become increasingly hard for Buffett to pinpoint his next takeover target. As a result, the cash pile of Berkshire Hathaway (NYSE:BRK.A) (BRK.B) has steadily grown and has thus recently exceeded the $100 B threshold. Therefore, it is only natural to wonder what the next takeover target of Warren Buffett will be. While most stocks are at least fully valued at this phase of the ongoing 8-year bull market, Phillips 66 (PSX) is one of the most attractive potential takeover targets right now.
First of all, Berkshire recently announced that it has taken a 38.6% stake in Pilot Flying-J, the largest operator of travel centers in North America, with the intention to become a majority stakeholder by 2023. Pilot sells 7 billion gallons of gasoline and diesel annually and serves more than 1.3 million guests a day. Therefore, Buffett recently proved his confidence in a downstream player in North America.
Berkshire also has a significant 16% stake in Phillips 66, which it essentially started to build in 2015. Since the initiation of the stake, Berkshire has consistently increased it and Buffett has repeatedly praised the management of the company as exemplary.
