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$123.89 1.40 (1.14%)
7/3/2008 1:02 PM

PetroChina Company Limited (ADR) (PTR)

CAPS Rating:
****

The Company is engaged in a range of petroleum-related activities, including the exploration, development, production and sale of crude oil and natural gas, and the refining, transportation, storage and marketing of crude oil and petroleum products.

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Avatar TMFSinchiruna (99.00) Submitted: 4/17/08 6:17 PM : Outperform Start Price: $150.87 PTR Score: -9.84

While it's clear PTR's stock was getting a little ahead of itself on a valuation basis, the story has not changed. China will continue to need as much oil as companies like this can possibly find, and the strength of the price of oil should have provided some support to this one as it fell, but it didn't. A 50% drop from its highs is way overdone in my opinion. CNOOC has already begun its recovery from lows, while PTR has not. Downside risk from these levels is virtually non-existent in my opinion, and upside has it back to its high above $260 during 2008 or 2009. Sweet.

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Avatar russiangambit (99.67) Submitted: 5/07/08 11:51 PM

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I heard on one of financial podcasts that Chinese government demands that PTR puts some of its profits towards certain social projects within China. Chinese government feels that PTR has to share the wealth. China is not exactly a democracy after all. And it is not surprising, when even US government is talking about windfall tax on oil companies.But this extra spending on the side makes me catious about PTR.

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Avatar TMFSinchiruna (99.00) Submitted: 5/19/08 7:56 PM

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Interesting... I hadn't heard that... we should find out the scale of those requirements relative to earnings. Given the haircut shares have had, I think those requirements would have to be pretty enormous to not be priced in at these levels. I am more concerned about some of PTRs projects in less than ideal locations around the globe. My stake in PT is small for that reason, but long-term I think it will return to its all-time highs at some point. I feel much more confortable with CEO (CNOOC) than with PTR.

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Avatar bgfmandt (35.43) Submitted: 6/16/08 10:33 AM

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The concern with PTR is that China limits prices that gasoline can be sold for in China. Since PTR is primarily a seller of Gasoline, the higher prices for oil may actually cut into its profit margin.CNOOC, who you mentioned, is on the better side of the fence as an oil and petroleum products supplier. The high price of oil helps their bottom line far more than PTR's. That's why the price of PTR has been falling since late April.

Again, the high price of oil = lower profits for PTR.

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