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What Makes Phillips 66 (PSX) a Strong Sell?

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Phillips 66PSX , which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in PSX.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 6 estimates moving down in the past 30 days, compared with just 2 upward revisions. This trend has caused the consensus estimate to trend lower, going from $5.60 a share a month ago to its current level of $5.00.

Also, for the current quarter, Phillips 66 has seen 2 downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to 64 cents a share from 98 cents over the past 30 days.

The stock also has seen some pretty dismal trading lately, as the share price has dropped 10.7% in the past month.

Phillips 66 Price and Consensus

Phillips 66 Price and Consensus | Phillips 66 Quote

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don't have a long time horizon to wait.

If you are still interested in the Oil & Energy sector, you may instead consider a better-ranked stock - Global Partners LP GLP . The stock currently holds a Zacks Rank #1 (Strong Buy) and may be a better selection at this time. You can see the complete list of today's Zacks #1 Rank stocks here .

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Global Partners LP (GLP): Free Stock Analysis Report

Phillips 66 (PSX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

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