When spin-off occurs cop will come down people that dont do much home work will get spooked out it happened with MRO I will be great time to accumulate Cop as far as Phillips 66 I will wait and see!IMHO the money is in E-P! I own COP,MRO,KOG, and looking to buy CJES @$17 Good luck Oilers
What are you talking about: <Since they intend to pay out $2.64 for the new COP, if it gets down to $52.80, that's a 5% yield.>
This stock will never see $52.80 again unless there is WW3. Additionally, the $2.64 annual yield will increase to an accululated $3.44 with the addition of the Downstream Company. The stock is rising to meet the new yield increase.
In order for COP to trade that low it would have a PE of under 10 based on 2011 split of E&P from the rest of the company. Similar equities like HES and OXY trade at higher multiples. The downstream company would also trade at a much higher multiple than the average M&R company, even considering that 25% of the companies earning power is in chemical and midstream JVs (which are growing at a faster rate).
AS I look at this spin off, I tend to think that managements reason for the split (unlock hidden value) may actually come to fruition and that the parts are in fact worth more than the whole.