Petrobras...........a good buy?

[Mega]

Back in Feb, when there was blood on the floor i rang Schiff & told him i wanted to buy some stock. They were not keen, but with a huff agreed.....One of the stocks was Singapor petrolium.........

China came along a bit latter and thought it was a good way to dump $ those bought it up. I am getting bought out! ( Bloody Hell i MADE some money with Euro-pac!)

Ok, so with the (nice profit) from the sale i am thinking about Petrobras............Any thoughts?

Schiffs crew don't like it because (they say) it don't pay a div?

Your thoughts?
Mike

[audrey_girl]

Re: Petrobras...........a good buy?

Back in Feb, when there was blood on the floor i rang Schiff & told him i wanted to buy some stock. They were not keen, but with a huff agreed.....One of the stocks was Singapor petrolium.........

China came along a bit latter and thought it was a good way to dump $ those bought it up. I am getting bought out! ( Bloody Hell i MADE some money with Euro-pac!)

Ok, so with the (nice profit) from the sale i am thinking about Petrobras............Any thoughts?

Schiffs crew don't like it because (they say) it don't pay a div?

Your thoughts?
Mike

my 2 cents (and this is just about what it is worth)...

i like PBR - bought it last year when it went way, way down - it is one of my core holdings. I hold it as a hedge against the dollar decline.

I also own HTE, PTE, ERF, and others for the dividend yield.

Still like XOM and CVR too - very well run companies with nice (not as nice as Canadian companies) dividends

again - my 2 Cents

if you have some free time pick up this book and take a look - you could probably finish it in a weekend

Jeff Rubin's - Your World is About to Get a Lot Smaller

very good read

regards -

ag

[MarkL]

Re: Petrobras...........a good buy?

...i am thinking about Petrobras............Any thoughts?
Mike

First, be aware that there is a PBE and a PZE and maybe others that I'm unfamiliar with. I believe PZE is an Argentinian sub-portion of Petrobras. I invested in PZE when oil was around 45 and sold it when oil hit 70 for the first time which was a couple bucks below the peak... but not bad.

First for context a touch of background on my style: I always look at stocks at 3 levels. The overall economy, the sector, and the stock. I try not to buy (or short) unless I believe all 3 levels are going the same direction.

So first, I believe that sometime within the next 9 months the economy will take another leg down. Having read your posts for a year, I'll take a guess you'd agree with me. When that happens, Oil will probably drop too, particularly if Oil continues to align more with the stock market than it does with it's fundamentals as has been true recently.

Next the sector. Energy/Oil's inventory fundamentals have been out of sync with the market for several months. The price has been going up, while inventory's have been swelling. This is the opposite of what normally happens and the consensus is that it is speculator driven. We on iTulip might also think that it's part of a WW move to hard commodity assets and that China is a significant portion of this. In addition, lately Oil has been rising and falling with the stock market, again, instead of due to it's fundamentals. EG, yesterday the stock market took a hit and Oil dropped to $67 quite suddenly. Summary: the sector will fall if the stock market falls unless oil reverts to it's fundamentals... at which point it will also fall!

Finally the corporate level. This is the most important of the 3... but prior to adopting this strategy, I'd lost lots of money on strong company's in bad sectors... and of course the whole world has recently lost a lot of money on strong company's in a bad economy! Overall, I think Petrobras is an excellent company that benefits both from being run well and from being a leader in the space. Lastly it's in Brazil (and SA) which means it could benefit from an oil hiccup in less stable countries like Iran, Russia, etc.

So to summarize the above... it's a good company, but I'd wait for either an economic or sector leg down before buying. Watch oil... and particularly oil in relationship to the economy. When oil drops (at this moment I'd say at least $8-$10/barrel), be aware of whether it's due to oil reverting to it's fundamentals or is due to stock dropage. Then, with that in mind, buy your Petrobras and ride BOTH the company and the sector/economy back up.

Remember also one thing... my 3 level model as I've described it above, has caused me to pass up many good opportunities... so I'm not saying that Petrobras won't go up. But my model has also caused me to pass up many more "opportunities" that didn't turn out so good. So I'm not saying Petrobras might not go up... I'm just saying that for my particular risk management methodology, I'd wait. Either the economy or oil fundamentals will give you a better buy-in... which means if you buy-in now you're going to take a loss before you take a profit.

Oh, and when the above drop happens... I'll be with you! -Mark

[MarkL]

Re: Petrobras...........a good buy?

One more thing... (more than you ever wanted from me, eh?). In the stock market there's a saying... "Don't try and catch a falling knife."

When the sector/economy and thus oil does drop, don't try and catch the bottom as it drops. Wait until it looks like it's actually reversing direction and then jump in with PBE or PZE. -Mark

[Mega]

Re: Petrobras...........a good buy?

Thanks Mark/Aud
Advice taken, i suspect we see a fall in sept anyway.........anyone got a chart for Petrobras?
Mike

[nero3]

Re: Petrobras...........a good buy?

Here is the Chart:
http://www.marketwatch.com/investing/stock/PBR/charts?countryCode=US&submitted=true&intflavor=advanced&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=20&freq=1&comp=Enter%20Symbol(s)%3A&compidx=aaaaa~0&compind=aaaaa~0&uf=1024&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=128&size=3&optstyle=330

In my opinion is is a speculative play on the growth trend in BRIC nations. I would not classify it as an investment, but a greater fools game. I think it's a poor sign that Warren Buffet is dumping COP, that's by the way is the cheapest energy stock. Based on the numbers, PBR, is in the league of being the most overpriced oil stocks, together with Petrochina. It's like paying double the price to be part of the emerging market story.

Buffet was doing something similar with HESS, an oil related company in 1981, after having bought it in 1979, the only difference was that the timing then was much better. Maybe Buffet missed with the timing, or have started really messing around, or still have faith but just wanted to raise cash for some bigger bargain stock, I don't know. We know he bought COP when oil prices were peaking.

[Mega]

Re: Petrobras...........a good buy?

What about Fininsh oil?
Mike

[lsa420]

Re: Petrobras...........a good buy?

What about Fininsh oil?
Mike

Have you looked into any Canadian O&G Trusts? Taxes can be a bit funky but yields can be high - $ hedge as well. Buy them via your IRA and taxes are no concern.

EuroPac should have plenty of recommendations.

[Raz]

Re: Petrobras...........a good buy?

Back in Feb, when there was blood on the floor i rang Schiff & told him i wanted to buy some stock. They were not keen, but with a huff agreed.....One of the stocks was Singapor petrolium.........

China came along a bit latter and thought it was a good way to dump $ those bought it up. I am getting bought out! ( Bloody Hell i MADE some money with Euro-pac!)

Ok, so with the (nice profit) from the sale i am thinking about Petrobras............Any thoughts?

Schiffs crew don't like it because (they say) it don't pay a div?

Your thoughts?
Mike

Petrobras (PBR) is an excellent integrated oil company and should show superior growth over a long cycle.
HOWEVER, a majority of the voting shares are held by the Brazilian government, so be careful.
If (when!) crude oil takes another run well above the $100 level and petroleum fuel prices are moving up rapidly, the Brazilian government just might force Petrobras to sell the end products (gasoline, distillate, etc.) at artificially low prices, thereby sqeezing out all the profits from their crude oil sales.

I'll post some reports on the company under Resources at the "Stock Market Research" thread.

[cjppjc]

Re: Petrobras...........a good buy?

Is this still in News?

[GRG55]

Re: Petrobras...........a good buy?

Back in Feb, when there was blood on the floor i rang Schiff & told him i wanted to buy some stock. They were not keen, but with a huff agreed.....One of the stocks was Singapor petrolium.........

China came along a bit latter and thought it was a good way to dump $ those bought it up. I am getting bought out! ( Bloody Hell i MADE some money with Euro-pac!)

Ok, so with the (nice profit) from the sale i am thinking about Petrobras............Any thoughts?

Schiffs crew don't like it because (they say) it don't pay a div?

Your thoughts?
Mike

George Soros Cut Petrobras Stake in Second Quarter

Aug. 14 (Bloomberg) -- Billionaire George Soros cut his stake in his biggest holding, Petroleo Brasileiro SA, in the second quarter while buying more shares of other energy producers.

His New York-based hedge-fund firm, Soros Fund Management LLC, sold 22 million U.S.-listed common shares of Petrobras, as the Brazilian oil company is known, according to a filing today with the U.S. Securities and Exchange Commission. Soros bought 5.8 million of the company’s U.S.-traded preferred shares.

Soros is taking advantage of the spread between the two types of U.S.-listed Petrobras shares, said Luis Maizel, president of LM Capital Group LLC, which manages about $4 billion. The common shares were 21 percent more expensive than preferred today, according to data compiled by Bloomberg.

“He knows he held a voting right in the common shares that would never translate to actual power,” Maizel said in an interview from San Francisco. “He’s just playing the spread.”

Petrobras preferred shares have also a 10 percent additional dividend, said William Landers, a senior portfolio manager for Latin America at Blackrock Inc.

“Given that there will most likely never be a change in control in the company, I see no reason to pay a higher price for the common shares.” Brazil’s government controls Petrobras and has a majority stake of voting shares...

...Soros boosted his stake in oil company Hess Corp. to 5.1 million shares as of June 30 from 3.7 million at the end of the first quarter, according to the filing. Hess was Soros’s second- largest holding. He also added to stakes in Houston-based Plains Exploration & Production Co. and bought shares in Calgary-based Suncor Energy Inc. and InterOil Corp. in Sydney.

...Soros’s biggest sale in the second quarter was his stake in ConocoPhillips, the second-largest U.S. refiner after he sold 4 million shares...

[tooppy]

Re: Petrobras...........a good buy?

George Soros Cut Petrobras Stake in Second Quarter

Aug. 14 (Bloomberg) -- Billionaire George Soros cut his stake in his biggest holding, Petroleo Brasileiro SA, in the second quarter while buying more shares of other energy producers. ......

I take this kind of info (dis-info ? ))) with few pinshes of salt. Who really knows what these guys Soros, Buffet etc .... are doing ? Someone (purposely ? ) can curve the market with this, whose benefit ?

[MarkL]

Re: Petrobras...........a good buy?

EG, yesterday the stock market took a hit and Oil dropped to $67 quite suddenly. Summary: the sector will fall if the stock market falls unless oil reverts to it's fundamentals... at which point it will also fall!

In just one day it's already dropped 87cents to $66.64, while the DXY has gone up by 1/2%...

Let's see how far this knife has to drop....

[*T*]

Re: Petrobras...........a good buy?

First, be aware that there is a PBE and a PZE and maybe others that I'm unfamiliar with. I believe PZE is an Argentinian sub-portion of Petrobras. I invested in PZE when oil was around 45 and sold it when oil hit 70 for the first time which was a couple bucks below the peak... but not bad.

First for context a touch of background on my style: I always look at stocks at 3 levels. The overall economy, the sector, and the stock. I try not to buy (or short) unless I believe all 3 levels are going the same direction.

So first, I believe that sometime within the next 9 months the economy will take another leg down. Having read your posts for a year, I'll take a guess you'd agree with me. When that happens, Oil will probably drop too, particularly if Oil continues to align more with the stock market than it does with it's fundamentals as has been true recently.

Next the sector. Energy/Oil's inventory fundamentals have been out of sync with the market for several months. The price has been going up, while inventory's have been swelling. This is the opposite of what normally happens and the consensus is that it is speculator driven. We on iTulip might also think that it's part of a WW move to hard commodity assets and that China is a significant portion of this. In addition, lately Oil has been rising and falling with the stock market, again, instead of due to it's fundamentals. EG, yesterday the stock market took a hit and Oil dropped to $67 quite suddenly. Summary: the sector will fall if the stock market falls unless oil reverts to it's fundamentals... at which point it will also fall!

Finally the corporate level. This is the most important of the 3... but prior to adopting this strategy, I'd lost lots of money on strong company's in bad sectors... and of course the whole world has recently lost a lot of money on strong company's in a bad economy! Overall, I think Petrobras is an excellent company that benefits both from being run well and from being a leader in the space. Lastly it's in Brazil (and SA) which means it could benefit from an oil hiccup in less stable countries like Iran, Russia, etc.

So to summarize the above... it's a good company, but I'd wait for either an economic or sector leg down before buying. Watch oil... and particularly oil in relationship to the economy. When oil drops (at this moment I'd say at least $8-$10/barrel), be aware of whether it's due to oil reverting to it's fundamentals or is due to stock dropage. Then, with that in mind, buy your Petrobras and ride BOTH the company and the sector/economy back up.

Remember also one thing... my 3 level model as I've described it above, has caused me to pass up many good opportunities... so I'm not saying that Petrobras won't go up. But my model has also caused me to pass up many more "opportunities" that didn't turn out so good. So I'm not saying Petrobras might not go up... I'm just saying that for my particular risk management methodology, I'd wait. Either the economy or oil fundamentals will give you a better buy-in... which means if you buy-in now you're going to take a loss before you take a profit.

Oh, and when the above drop happens... I'll be with you! -Mark

Sound advice.

Petrobras is on my bargain shopping list. When / if the second downleg comes, it is on my shortlist of energy co.s to own.