Phillips 66 (PSX): Today's Featured Basic Materials Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

Phillips 66 ( PSX) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day down 0.7%. By the end of trading, Phillips 66 fell $0.90 (-1.4%) to $65.18 on light volume. Throughout the day, 2,836,386 shares of Phillips 66 exchanged hands as compared to its average daily volume of 4,590,400 shares. The stock ranged in price between $64.30-$66.18 after having opened the day at $65.81 as compared to the previous trading day's close of $66.08. Other companies within the Basic Materials sector that declined today were: Prospect Global Resources ( PGRX), down 11.1%, Golden Star Resources ( GSS), down 10.7%, Minco Gold Corporation ( MGH), down 10.3% and Constellation Energy Partners ( CEP), down 8.0%.
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Phillips 66 operates as an independent downstream energy company. The company operates in three segments: Refining and Marketing (R&M), Midstream, and Chemicals. Phillips 66 has a market cap of $41.2 billion and is part of the energy industry. The company has a P/E ratio of 8.6, below the S&P 500 P/E ratio of 17.7. Shares are up 24.4% year to date as of the close of trading on Monday. Currently there are 7 analysts that rate Phillips 66 a buy, no analysts rate it a sell, and 5 rate it a hold.

TheStreet Ratings rates Phillips 66 as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

On the positive front, Torch Energy Royalty ( TRU), down 14.8%, Allied Nevada Gold ( ANV), down 8.6%, Endeavour International ( END), down 8.1% and Magnum Hunter Resources Corportion ( MHR), down 7.8% , were all gainers within the basic materials sector with Cimarex Energy Company ( XEC) being today's featured basic materials sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).

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