What's Next for Phillips 66 Stock After a Big Purchase?

PSX announced an agreement with NOVONIX on August 9

Aug 12, 2021 at 12:08 PM
facebook X logo linkedin


On Aug. 9, energy company Phillips 66 (NYSE:PSX)  announced that it has entered into an agreement to acquire a 16% stake in NOVONIX Limited, an Australian-based company that develops and supplies materials for lithium-ion batteries.

After the deal was announced, Phillips 66 stock shed 1.3% on the day. Longer term, PSX is up 5.4% year-to-date, but has shed xx% off its June 10 annual high. Despite the year-to-date breakeven battle, 8 of the 11 in coverage maintain a "buy" or better rating, with zero "sells" on the books. Moreover, Phillips 66 offers a forward dividend of $3.60 and a dividend yield 4.85%.

Overall, Phillips 66 stock has strong potential as a recovery play from a fundamental perspective, and offers a decent level of security as a long-term dividend investment especially given PSX's large market cap of $32.6 billion. Since reporting fiscal 2020 financial results, Phillips 66 has grown revenues by 26% and has increased net income by about $2.3 billion. However, PSX's revenues have decreased by 27% and its net income is still down by $7.3 billion since fiscal 2018. Nonetheless, Phillips 66 is expected to return to profitability in the next quarter, with analysts placing forward price-earnings ratio of 40.82 on PSX.

PSX calls can be had for a relative bargain right now. This is per the security’s Schaeffer’s Volatility Index (SVI) of 33%, which stands higher than just 13% of readings from the past year, suggesting options traders are pricing in low volatility expectations at the moment. Even better, the stock’s Schaeffer’s Volatility Scorecard (SVS) ranks at 88 out of a possible 100. This implies the equity has exceeded these volatility expectations – a boon for buyers.
 
 

Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.


Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!

 

 
 
 


 
 

Rainmaker Ads CGI