Petroleo Brasileiro S.A. (ADR) (NYSE:PBR)

CAPS Rating: 3 out of 5

A one-time monopoly, Petroleo Brasileiro remains the leader in oil exploration, production, and distribution in Brazil.


Player Avatar LSMiniSkirt (88.73) Submitted: 1/13/2013 5:58:52 PM : Outperform Start Price: $31.00 PBR Score: -77.96

I reviewed the 3rd quarter results of PBR (rated “hold”) and in my opinion, they were better than what the media is saying, albeit mediocre. They are making a $3 per share profit, although lower earnings for two consecutive years. Revenues are growing at a 13% rate over the past 5 years, and 10% over the past 4 quarters, so the earnings should turn around as overseas sales increase. It is also selling at a 10% discount to book value, which is usually the price for stocks that are losing money instead of making money. It is a good stock selling at bargain basement prices. I believe a 20% rebound is in order.

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