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Petróleo Brasileiro S.A. - Petrobras Message Board

  • musketeernumberone musketeernumberone Oct 13, 2008 9:25 AM Flag


    Hey Fred, what's your thinking about FRO... I also like the divvy, but they pay-out on the basis of short term profitability... the divvy is not always so high... Safe for now? What happens if they cut that divvy in half? I think FRO is much safer than Dry-bulkers...

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    • Musk, world demand for goods is way down, and I think FRO stays down with it. They also have too much debt for my liking.

      A buddy of mine sent me an e-mail on ACAS, and I spent hours this AM kicking its tires and could not find much wrong with it. It is paying a 28% dividend; there is a smart poster on the message board there, Ferdiefor, who I have run across before, and he says ACAS is best in breed.

      They have enough to cover their dividend through 2009.

      In addition, Citibank's trust preferreds were yielding 17% when I bought a nice chunk on Friday. Their symbol is C-V.

      I like these yields and think they are safer bets than FRO's.

      • 2 Replies to docjoe999
      • ACAS is not my cup of tea... looks like a private equity finance scheme. Like the sound of the Citi trust preferreds except I have an allergy to Citi having worked there (many years ago). LOL

        I think low oil prices may help maintain demand... thus my interest in FRO (divvy is nice, too).

      • "Musk, world demand for goods is way down, and I think FRO stays down with it."

        reply from JD's earlier post:

        Oct. 13 (Bloomberg) -- China, the world's second-largest energy user, increased crude-oil imports to a record last month, taking advantage of falling prices, as domestic refining capacity climbed.

        FWIW, many people will respond to lower gasoline prices. There is no way that sharply reduced prices will not counteract recessionary pressures to some unknown degree.

    • Honestly, ask Doc. If it were not for his conspicuous and energetic grudge against PBR, I would consider paying him for his investing advice. The short-term wisdom of the views that you and he shared defeated everything that I still believe about PBR and the oil sector in the long-term.

      • 2 Replies to fred.mrozek
      • <If it were not for his conspicuous and energetic grudge against PBR>

        Fred, the only thing I dislike with regards to PBR is the price of the Real and the price of oil. PBR is the backbone of the new Brazil. They have earned much of their success.

        The problem with PBR is/was the peak oil nuts and dollar-is-dead crowd. They pushed PBR too high. Once commodities, the Real, and oil stabilize, I will consider going long PBR again.

        Before going long though, I will also need to see what terms PBR gets on its loans. I expect the credit market to thaw but still remain tight for the next two years.

        In addition, I will want to buy after the inevitable dilution of shares. Issuing new shares is PBR's easiest way to access badly needed capital.

        I can't come up with a reasonable target price to buy until I know these things.

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