U.S. stocks are roughly flat in early afternoon trading, with the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) down 0.12% and 0.03%, respectively, at 12:25 p.m. EST. Shares of refiner Phillips 66 are down, but only barely, at 0.08%.

Author: Mike Mozart. Republished underĀ CC BY 2.0.

Warren Buffett added to Berkshire Hathaway's already consequential investment in Phillips 66 last week, pushing its ownership stake to 12% (higher than the combined stake of the two largest index fund providers, Vangard and Blackrock). The investment, worth $4.87 billion as of yesterday's close, is one of Berkshire's public market investments.

The latest series of purchases is a small component of that position, but it is instructive because it is indication of the sort prices that are attractive enough for Buffett to add opportunistically to the investment. During the first four days of last week, Berkshire acquired nearly two-and-a-half million shares of Phillips 55 at an average cost of $77.22.

With an ownership stake greater than 10%, Berkshire Hathaway meets the standard to qualify as a corporate insider and must, therefore, report any changes in ownership in a Form 4 filing with the Securities and Exchange Commission within two business days.

After topping out at $94.12 in early November, shares of Phillips 66 have gone on to decline by 19% as of yesterday's close. Much of the drop is attributable to what appears to be a short-term overreaction to Congress' decision to lift the 40-year ban on crude oil exports. For an investor with a multi-decade time horizon like Buffett, that price action spelled opportunity.

Buffett established the bulk (86%) of the existing position during the third quarter of last year, between July 1 and Aug. 25. The volume-weighted average price of Phillips 66 shares over that period was $80.04, according to data from Bloomberg.

Because Berkshire's purchases represent nearly two-fifths (38%) of the volume recorded by Bloomberg, it's a good bet that Berkshire's average cost was very close to $80.04.

There are a couple of takeaways, here: First, with last week's purchases at an average cost of $77.22, Buffett has lowered his cost basis on the aggregate position. If he likes Phillips 66 at $80, he likes it even a little bit better at $77.

This leads us to our second takeaway, one that's worth noting for stock-pickers: Just as Buffett is now taking the opportunity to lower his cost basis, investors who do not already own Phillips 66 shares have the opportunity to open a position at a lower cost than Buffett's.

Such opportunities to piggyback on arguably the world's greatest stockpicker don't come around all that often, or they aren't clearly identified as such when they do; this one deserves active investors' full attention.