Should You Buy or Sell the Phillips 66 (PSX) Correction?

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Marathon Petroleum Corp (NYSE:MPC) and HollyFrontier Corp (NYSE:HFC) are in a more similar situation to Phillips 66 (NYSE:PSX): they are quite cheap even if we look at their historical results, and in fact Marathon boasts a slightly lower five-year PEG ration than that company does at 0.7. That company also reported higher sales in the fourth quarter of 2012 versus a year earlier, and combined with its cheap pricing it might well be a better value prospect. HollyFrontier delivered high earnings growth in its most recent quarter compared to the same period in the previous year, but that appears to have been a temporary bump as revenue growth was lower and analyst expectations are calling for something of a drop in earnings in coming quarters.

We like Phillips 66 (NYSE:PSX) at these levels, though we would want to check out its last quarter in more detail to try to determine what caused the decrease in net income. In addition, the rest of the industry also seems rich in value opportunities, and with some companies not having issues in recent quarters those peers might be better places for a value investor to start looking.

Disclosure: I own no shares of any stocks mentioned in this article.

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