TRN - PSX: Texas based with a great mix of Value and Price Momentum

T

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Last July 31st, I bought TRN (Trinity Industries, a Dallas based railcars maker). Why? Its daily and its weekly price momentum indicators (oscillators) made a bullish reversal. Additionally, the fundamentals looked great: PE = 9, Price/Sales = 0.9, PEG = 0.97. That stock is now up 10% and should gain another 5% to reach its 2013’s high.

Yesterday, I bought PSX (Phillips 66, a Houston based oil & gas refiner). Why? For the same reasons. A price momentum bullish signal was delivered and that company shows good fundamentals: PE = 8, Price/Sales = 0.22, PEG 0.82. My target: a 20% gain to retest 70 USD (2013’s high).

Looks like mixing value and price momentum remains a good recipe to increase the chances to select successful companies.

Daniel Vermeersch
 
Daniel, the refiners like PSX have always traded mysteriously to me. A friend who ran a Wild Cat Rig tried to explain how they trade in tandem with the "crack spread", I think my buddy was better at finding oil than investing in WNR, TSO, FRO, PSX(if it was trading back than) VLO.


I have watched and traded WNR, TSO, and VLO and recently added PSX to my watch list. Phil, my friend had said refineries would trade independently of the price of oil eventually. So far, he is wrong again (that's five strikes for him!) after making money on TSO and WNR's upside to 52 week highs months ago. How do you go about putting on a refinery stock trade when crude is pushing $109.00 a barrel?

If I was still in contact with Phil, I could ask him if he had sold out his position, that was usually a sure sign the group was about to head due North without let up! I think I sold several oil stocks when he jumped on board, he gave them the classic kiss of death!
 
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