Phillips 66 Sees Unusually Large Options Volume (NYSE:PSX)

Key Points

• Unusual options activity: Traders purchased 52,191 Phillips 66 call options, 1,650% above the average daily volume of 2,983 calls.
• Strong financial performance: Shares rose to $239.31, near their 52-week high, after the company reported quarterly EPS of $9.41—beating estimates by $1.91—and revenue of $52.04 billion.
• Shareholder returns and outlook: Phillips 66 authorized a $10 billion share-repurchase program, equal to up to 11.8% of outstanding shares, and declared a quarterly dividend of $1.27 per share. Analysts maintain a “Moderate Buy” consensus rating with an average price target of $206.56.

Phillips 66 (NYSE:PSX - Get Free Report) was the target of some unusual options trading activity on Monday. Traders bought 52,191 call options on the stock. This is an increase of 1,650% compared to the average daily volume of 2,983 call options.

Phillips 66 Price Performance

Shares of NYSE PSX traded up $5.70 during mid-day trading on Monday, reaching $239.31. 1,989,447 shares of the company traded hands, compared to its average volume of 2,821,263. Phillips 66 has a fifty-two week low of $121.24 and a fifty-two week high of $240.47. The firm has a market cap of $95.49 billion, a PE ratio of 13.64, a price-to-earnings-growth ratio of 0.17 and a beta of 0.68. The stock has a fifty day simple moving average of $192.72 and a 200-day simple moving average of $176.20. The company has a debt-to-equity ratio of 0.57, a current ratio of 1.32 and a quick ratio of 1.00.

Phillips 66 (NYSE:PSX - Get Free Report) last issued its quarterly earnings results on Wednesday, August 5th. The oil and gas company reported $9.41 earnings per share (EPS) for the quarter, beating the consensus estimate of $7.50 by $1.91. The company had revenue of $52.04 billion for the quarter, compared to analysts' expectations of $43.60 billion. Phillips 66 had a return on equity of 19.93% and a net margin of 4.54%.During the same period last year, the firm earned $2.38 EPS. Equities research analysts anticipate that Phillips 66 will post 24.44 EPS for the current fiscal year.

Phillips 66 announced that its Board of Directors has initiated a share repurchase program on Friday, July 31st that authorizes the company to buyback $10.00 billion in outstanding shares. This buyback authorization authorizes the oil and gas company to repurchase up to 11.8% of its shares through open market purchases. Shares buyback programs are typically a sign that the company's leadership believes its shares are undervalued.

Phillips 66 Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Tuesday, September 1st. Stockholders of record on Tuesday, August 18th will be given a dividend of $1.27 per share. The ex-dividend date of this dividend is Tuesday, August 18th. This represents a $5.08 dividend on an annualized basis and a dividend yield of 2.1%. Phillips 66's payout ratio is 28.95%.

Insider Buying and Selling at Phillips 66

In other news, CFO Kevin J. Mitchell sold 11,021 shares of the company's stock in a transaction that occurred on Thursday, July 9th. The stock was sold at an average price of $190.03, for a total transaction of $2,094,320.63. Following the completion of the transaction, the chief financial officer directly owned 97,376 shares of the company's stock, valued at approximately $18,504,361.28. This represents a 10.17% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Brian Mandell sold 30,000 shares of the firm's stock in a transaction that occurred on Tuesday, August 11th. The stock was sold at an average price of $215.00, for a total value of $6,450,000.00. Following the completion of the sale, the executive vice president directly owned 61,595 shares in the company, valued at approximately $13,242,925. This trade represents a 32.75% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 100,507 shares of company stock worth $21,770,810 in the last quarter. 0.40% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Phillips 66

A number of large investors have recently made changes to their positions in PSX. NFSG Corp increased its holdings in Phillips 66 by 105.6% in the first quarter. NFSG Corp now owns 146 shares of the oil and gas company's stock worth $27,000 after buying an additional 75 shares during the last quarter. Axiom Investment Management LLC acquired a new position in shares of Phillips 66 during the first quarter valued at about $27,000. SWAN Capital LLC increased its position in shares of Phillips 66 by 1,055.6% during the fourth quarter. SWAN Capital LLC now owns 208 shares of the oil and gas company's stock valued at $27,000 after purchasing an additional 190 shares during the period. Compass Financial Management LLC acquired a new position in Phillips 66 in the second quarter worth about $28,000. Finally, Kelleher Financial Advisors bought a new stake in Phillips 66 in the second quarter valued at $29,000. Institutional investors and hedge funds own 76.93% of the company's stock.

Analysts Set New Price Targets

Several brokerages have recently issued reports on PSX. Guggenheim raised shares of Phillips 66 to an "outperform" rating in a report on Wednesday, May 27th. Barclays lifted their price objective on shares of Phillips 66 from $183.00 to $216.00 and gave the company an "equal weight" rating in a research report on Thursday, August 6th. UBS Group boosted their target price on shares of Phillips 66 from $212.00 to $235.00 and gave the company a "buy" rating in a research note on Monday, July 27th. Citigroup restated a "neutral" rating on shares of Phillips 66 in a research report on Thursday, August 6th. Finally, The Goldman Sachs Group increased their price objective on Phillips 66 from $207.00 to $235.00 and gave the stock a "neutral" rating in a report on Wednesday, July 22nd. One analyst has rated the stock with a Strong Buy rating, thirteen have given a Buy rating and eight have given a Hold rating to the company's stock. According to MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $206.56.

About Phillips 66

Phillips 66 NYSE: PSX is an independent energy manufacturing and logistics company engaged primarily in refining, midstream transportation, marketing and chemicals. The company processes crude oil into transportation fuels, lubricants and other petroleum products, operates pipeline and storage infrastructure, and participates in petrochemical production through strategic investments. Phillips 66 serves commercial, industrial and retail customers and positions its operations across the value chain of the downstream energy sector.

The company's principal activities include refining crude oil into gasoline, diesel, jet fuel and feedstocks for petrochemical production; operating midstream assets such as pipelines, terminals and fractionators that move and store crude oil and natural gas liquids; and marketing and distributing fuels and lubricants through wholesale and retail channels.

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