Gregory Hayes, a director at Phillips 66 (PSX), recently bought 10,250 shares. The buy came to a total cost just over $1.1 million, and increased the director’s stake by a massive 253 percent.
This is the first purchase at the company in two years, following another buy from a director for 77 shares valued at just under $5,900. A number of company executives have been sellers of shares over the past two years, largely by exercising options.
Overall, company insiders own just under 0.5 percent of the company.
The oil and gas midstream company is up 11 percent over the past year, thanks to strong energy prices. Phillips 66 grew earnings by 48 percent, and revenue by nearly 24 percent. That operational growth in excess of the share price has dropped the company’s valuation to just 7 times forward earnings.
Action to take: Investors may like shares here. The stock yields 3.9 percent at today’s prices, and that payout has increased in recent years. It’s also only about 15 percent of earnings, so there’s plenty of room for more dividend increases.
For traders, shares have come down a bit in the past few days, and look set for a short-term rebound. The May $105 calls, last going for about $1.60, offer mid-to-high double-digit returns on a bounce higher in Phillips 66 stock in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.