Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified

Phillips 66

(

PSX

) as a pre-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Phillips 66 as such a stock due to the following factors:

  • PSX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $466.8 million.
  • PSX traded 64,608 shares today in the pre-market hours as of 8:45 AM.
  • PSX is up 3.4% today from yesterday's close.

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More details on PSX:

Phillips 66 operates as an energy manufacturing and logistics company. It operates in four segments: Midstream, Chemicals, Refining, Marketing and Specialties. The stock currently has a dividend yield of 2.9%. PSX has a PE ratio of 10.7. Currently there are 10 analysts that rate Phillips 66 a buy, no analysts rate it a sell, and 3 rate it a hold.

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The average volume for Phillips 66 has been 5.1 million shares per day over the past 30 days. Phillips 66 has a market cap of $37.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.80 and a short float of 1% with 0.99 days to cover. Shares are down 4.6% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Phillips 66 as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 120.6% when compared to the same quarter one year prior, rising from $535.00 million to $1,180.00 million.
  • PSX's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.86 is somewhat weak and could be cause for future problems.
  • PSX has underperformed the S&P 500 Index, declining 12.70% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has significantly decreased to $429.00 million or 77.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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