On September 8, 2023, Kevin Mitchell, the Executive Vice President and Chief Financial Officer of Phillips 66 (PSX, Financial), sold 30,800 shares of the company. This move is part of a series of transactions made by the insider over the past year, which have seen a total of 40,700 shares sold and no shares purchased.
Kevin Mitchell has been with Phillips 66 since its inception in 2012, serving as the company's CFO. He has played a crucial role in the company's financial strategy and operations, contributing to its growth and success in the energy sector.
Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Phillips 66 Partners, the company’s master limited partnership, is integral to the portfolio. Headquartered in Houston, the company has 14,300 employees committed to safety and operating excellence.
The insider's recent sell-off has raised some eyebrows among investors and analysts, prompting a closer look at the company's stock performance and insider trading trends.
The insider transaction history for Phillips 66 shows a trend of more sells than buys over the past year. There have been 8 insider sells and only 1 insider buy during this period. This could indicate that insiders, including Mitchell, may perceive the stock as overvalued, prompting them to sell their shares.
On the day of the insider's recent sell, shares of Phillips 66 were trading at $120.97, giving the company a market cap of $55.2 billion. The price-earnings ratio stood at 5.38, lower than both the industry median of 9.13 and the company's historical median price-earnings ratio. This suggests that despite the insider's sell-off, the stock may still be undervalued based on earnings.
However, when looking at the price-to-GF-Value ratio, which stands at 1.09, the stock appears to be modestly overvalued. The GF Value is an intrinsic value estimate developed by GuruFocus, taking into account historical multiples, a GuruFocus adjustment factor based on past returns and growth, and future business performance estimates from Morningstar analysts.
In conclusion, while the insider's recent sell-off may raise concerns, it's important for investors to consider the broader context. Despite the sell-off, Phillips 66's stock may still hold value based on its earnings, although it appears modestly overvalued when considering the GF Value. As always, investors should conduct their own research and consider multiple factors before making investment decisions.
