Investors who focus on high growth momentum often look for a combination of accelerating fundamentals and a stock that is not already extended. The screen used for this article applies both ideas by requiring a high growth momentum rating of at least 4, a technical rating of at least 7, and a setup rating of at least 7. PHILLIPS 66 (NYSE:PSX) is one of the names that fits the profile, with a high growth momentum rating of 6, a technical rating of 10, and a setup rating of 7.
The momentum scorecard
The high growth momentum rating is designed to capture more than steady growth. It rewards accelerating earnings and sales, margin expansion, earnings surprises, and positive analyst revisions, traits that are common in CANSLIM and Minervini style approaches. Phillips 66 shows several of those traits, although the picture is not perfect.
- EPS over the trailing 12 months is $14.89, with EPS growth of 341.8% compared with the same period a year ago.
- The latest quarter grew EPS by 295.4% year over year, after gains of 154.4%, 1,746.7%, and 23.5% in the prior three quarters. Current estimates point to another 241.3% gain in the next quarter.
- Sales growth reaccelerated to 55.3% in the latest quarter from 6.9% and 1.3% in the two preceding quarters.
- Net profit margin expanded to 7.54% in the latest quarter from 0.63% in the prior quarter.
- The company beat EPS estimates in all four recent quarters, with an average beat of 68.7%, and beat revenue estimates in three of the four quarters.
- Free cash flow per share came in at $15.95, up 50.4% year over year.
- Analysts have raised next-year EPS estimates by 21.6% over the past three months.
These are the signals that tend to separate high growth momentum names from stocks that simply reported a good quarter. The main limitation is cyclicality. Phillips 66's full-year EPS fell 61.4% in the previous fiscal year, and next-year revenue estimates have dipped 3.4% over the past three months, so the current momentum should be viewed in the context of a stronger refining and marketing environment.
Technical strength and setup quality
Growth momentum is only half of the methodology. The other half is technical timing, and Phillips 66 currently scores very well there too. Its technical rating is a perfect 10, supported by positive short- and long-term trends and a price sitting near its 52-week high. It has outperformed 95% of all stocks over the past year and 91% of its industry group. The S&P 500 is in the upper part of its range, but Phillips 66 is closer to new highs, which points to market leadership.
A technical rating of 10 alone does not mean the stock is a good entry. The setup rating of 7 is intended to answer that timing question. The technical report notes that volatility has declined while prices consolidate, and it identifies a bull flag pattern. Support is clustered between $236.73 and $241.95, just below the current price of $241.96, giving a possible stop-loss area. The automated setup suggests a buy stop at $246.96, above the 10-day high, with a stop-loss below support at $236.72. That would put the worst-case loss at roughly 4.15%, but the trade only works if an actual breakout occurs, so earnings dates and news should be checked before acting. Investors who want to review the full trend and support structure can check the technical analysis report.
Why the combination matters
The value of combining these ratings is that it filters for stocks that are strong on both fundamentals and price action. A high growth momentum score can identify accelerating earnings, but buying an extended stock can still produce poor risk/reward. The technical rating helps confirm that the stock is in an uptrend, while the setup rating looks for a consolidation or pullback that offers a defined entry and exit.
A supportive pattern screen
PSX is also flagged by the Bull Flag Stocks screen, which focuses on names forming bullish continuation patterns after a prior advance. That is a useful independent confirmation of the technical setup: the consolidation is a constructive pause within the larger uptrend, not a sign of weakness.
Investors who want to apply this same methodology across the market can use this screen to find additional stocks that currently combine high growth momentum with strong technical trends and workable setups. As always, a screen is a starting point, not a complete plan, and each name should be validated with its own risk management rules.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Always conduct your own research and consider your risk tolerance before making investment decisions.
Read full article here »
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Phillips 66 (NYSE:PSX) Pairs High Growth Momentum With a Breakout Setup
Investors who focus on high growth momentum often look for a combination of accelerating fundamentals and a stock that is not already extended. The screen used for this article applies both ideas by requiring a high growth momentum rating of at least 4, a technical rating of at least 7, and a setup rating of at least 7. PHILLIPS 66 (NYSE:PSX) is one of the names that fits the profile, with a high growth momentum rating of 6, a technical rating of 10, and a setup rating of 7.
The momentum scorecard
The high growth momentum rating is designed to capture more than steady growth. It rewards accelerating earnings and sales, margin expansion, earnings surprises, and positive analyst revisions, traits that are common in CANSLIM and Minervini style approaches. Phillips 66 shows several of those traits, although the picture is not perfect.
These are the signals that tend to separate high growth momentum names from stocks that simply reported a good quarter. The main limitation is cyclicality. Phillips 66's full-year EPS fell 61.4% in the previous fiscal year, and next-year revenue estimates have dipped 3.4% over the past three months, so the current momentum should be viewed in the context of a stronger refining and marketing environment.
Technical strength and setup quality
Growth momentum is only half of the methodology. The other half is technical timing, and Phillips 66 currently scores very well there too. Its technical rating is a perfect 10, supported by positive short- and long-term trends and a price sitting near its 52-week high. It has outperformed 95% of all stocks over the past year and 91% of its industry group. The S&P 500 is in the upper part of its range, but Phillips 66 is closer to new highs, which points to market leadership.
A technical rating of 10 alone does not mean the stock is a good entry. The setup rating of 7 is intended to answer that timing question. The technical report notes that volatility has declined while prices consolidate, and it identifies a bull flag pattern. Support is clustered between $236.73 and $241.95, just below the current price of $241.96, giving a possible stop-loss area. The automated setup suggests a buy stop at $246.96, above the 10-day high, with a stop-loss below support at $236.72. That would put the worst-case loss at roughly 4.15%, but the trade only works if an actual breakout occurs, so earnings dates and news should be checked before acting. Investors who want to review the full trend and support structure can check the technical analysis report.
Why the combination matters
The value of combining these ratings is that it filters for stocks that are strong on both fundamentals and price action. A high growth momentum score can identify accelerating earnings, but buying an extended stock can still produce poor risk/reward. The technical rating helps confirm that the stock is in an uptrend, while the setup rating looks for a consolidation or pullback that offers a defined entry and exit.
A supportive pattern screen
PSX is also flagged by the Bull Flag Stocks screen, which focuses on names forming bullish continuation patterns after a prior advance. That is a useful independent confirmation of the technical setup: the consolidation is a constructive pause within the larger uptrend, not a sign of weakness.
Investors who want to apply this same methodology across the market can use this screen to find additional stocks that currently combine high growth momentum with strong technical trends and workable setups. As always, a screen is a starting point, not a complete plan, and each name should be validated with its own risk management rules.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Always conduct your own research and consider your risk tolerance before making investment decisions.
Read full article here »