Is ConocoPhillips a Buy Without Downstream Operations?

With shares of ConocoPhillips (NYSE:COP) trading around $57.06, is COP a BUY, a WAIT and SEE, or a STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET Investing Framework:

E = Equity to Debt Ratio Could be Closer to Zero

ConocoPhillips boasts a respectable debt-to-equity ratio of 0.45 given its competition and the capital-intensive industry in which it operates. Anadarko Petroleum Corporation (NYSE:APC) clocks in with a relatively unattractive debt-to-equity ratio of 0.69. However, even while recovering from the Deepwater Horizon disaster BP (NYSE:BP) edges out a win with a debt-to-equity ratio of 0.42.

ConocoPhillips has a war chest of just $1.27 billion to balance its debt of $24.89 billion. BP has $16.36 billion in total cash and $49.08 billion in total debt (again, a throwback to its ongoing Deepwater Horizon disaster recovery). Anadarko Petroleum has $2.53 billion in total cash against $14.14 billion in total debt.

T = Technicals on the Stock Chart are… not Strong

ConocoPhillips is trading in a 52-week range between $50.62 and $78.29 per share. It was coasting along its high for pretty much the whole month of March before April 30, when the company spun off its downstream business as Phillips 66 (NYSE:PSX). The companies were separated through the distribution of Phillips 66 shares to holders of ConocoPhillips common stock at a ratio of one to two.

As of November 27 the company’s stock price is 0.45 percent below its 20-day simple moving average, or SMA; 0.95 percent below its 50-day SMA; and 2.41 percent above its 200-day SMA.

Since the beginning of 2012 the stock price has been in a downward trend, losing 24.26 percent of its value this year to date, and 16.49 percent of its value year over year.

It’s important to note that shares of ConocoPhillips lost 21.11 percent of their value during the spin off transaction. For the year to date until the transaction happened, shares were down 3.42 percent. Since May 1, the day after the transaction, shares are down 0.58 percent.