You seem to be one of the more intelligent posters on this board. In your opinion, does PBR have a chance for capital appreciation? I know the question sounds simplistic. Unfortuneatly, I didn't take all the factors which could affect this stock into consideration. I'm guessing, (only guessing) $115.00 oil would solve some of PBR's problems?
What is your take? My cost is $33.00
Well, on Oct 5 PBR was trading around 22 bucks. I didn't buy it but it has shown some strength since then. It was deeply undervalued and those that bought it then have made some money. In general, all EM stocks underperformed in 2011 so 2012 could be a better year. The European issues seem to be resolving themselves.
Looks like Soros got out near the bottom.
I'd still stick with selling it at around where you bought it. Around 33 to 35. If EM's are strong we could see PBR make a comeback but I'd exit around 45. At least you could do a round trip. I did that actually......a fractional short term tax loss. 33 wasn't a terrible place to buy, many people have started around that price. There are better oil companies to be in with less political issues. Musk has pointed out that coal is a good place to be. BTU, ACI. I still like FCX, CLF, MOS at current levels. They all have good fundamentals.
I like what Frank Holmes has to say regarding the economy, stocks, and gold.
Here is Frank Holmes fund family: http://biz.yahoo.com/p/fam/u_s__global_investors.html
That is some really bad performance, and it gets worse. Now take a look at this video saying that $100 oil is here to stay: http://finance.yahoo.com/blogs/daily-ticker/frank-holmes-three-reasons-100-oil-stay-112446384.html
Everything this guy has been in on then has been wrong: China, high oil, and a weak dollar. So why do they have him on a news show???
My favorite part is the absolute misunderstanding of Europe. "The network of Lehman's brothers was much more pervasive than Greece is. Banks have a capital issue because they sold gold to buy Greek debt... I think that they can recapitalize the banks. I think something will have to take place with regards to Greece. You will get club med currency, collateral will be Olive oil and feta cheese... but nothing like 2008."
I am glad that you posted this Jacque because it shows how dumb some fund managers are with regards to Europe. First off, it is not Greece. It is a Greek default that triggers insolvency issues with European banks. And European banks are much larger and more important to world markets than Lehman's ever was.
Furthermore, he wants a club med currency neglecting to mention that a Southern European euro would bankrupt the Northern European banks.
But not to worry, he has that covered. The Europeans will "recaptialize" the banks. So the citizens of Europe will happily watch as the ECB prints out $3 trillion Euros for the benefit of the banks. That is what happened in the U.S., and everyone here is just thrilled about it.
And the reason this is going to happen even though Angela Merkel just said it was not? Why, it would hurt the world economy if this didn't happen and hurt fund managers like him.
It is because of fools like him that the market rallies whenever there is news of a European master plan when there is no easy way out. What he has described, the PIIGS defaulting, would be an unmitigated disaster for the world markets.
My thoughts on PBR are mixed. All of the "politics" are known and priced into the stock now imho.
Analysts give a 3 to 5 year growth rate of 6.83%. My calculations give it a higher growth rate of around 11%. I use a method of geometrically averaging certain historic growth factors. Geometrically averaging smooths out any outliers within the data. The stock is certainly very cheap at this point.
I get two sell points depending on how conservative or aggressive you want to be.
conservative price target= 35.60
optimistic price target = 47.00
Of course there is all the political risk associated, but at the current price, it looks like a buy to me even with the political risk. However, I would be tempted to sell at around 35.
I'm not an oil expert my any means, I'm just looking at the company stats, that being said, predicting the price of oil over the short run is pretty foolish imho. There are arguments on both supply and demand side. Currently, the media has everyone worked up over recession fears, etc. I think this is typical fear mongering and shorts will try and scare people out of positions so I wouldn't put too much credence in what the bears say. Again just my opinion.
You didn't ask for my advice, but I'll give you my take and you have another opinion.
I won't get into all the specifics and reasons why. Simply put, sell 75% of you position in PBR. Take 25% and put in in APA, take the other 25% and put it in MRO, with the remaining 25% take your pick of TOT STO or SSL .... and wait. No guarantees, but I think you have a much better chance than sitting in PBR or doubling up(down).