While no one can control how the market trades or values stocks, one thing is certain....PBR is a colossal failure when measured with any metric.
The government is corrupt...not that ours isn't...but PBR should not be publicly traded.
They continue hemorrhage money, by importing far more oil then they produce.
The markets no longer believe ANYTHING PBR has to say...
While I have been accused of being bitter because I sold the stock at $11.18, I'm not bitter at all. Investing is about learning lessons..I looked at the fundamentals and decided there were better places to put my money.
Some of you want to talk about swing trades and living it up abroad. Good for you.
You have to keep one thing in the front of your mind when discussing PBR.... it's not a stock in the regular sense. It's a minority partnership with the government of Brazil. Secondarily, it is a highly levered entity with an unusually high responsiveness to currency exchange rates, due to it's dollar and euro denominated debt and the fact that it must import fuel, products and services in those currencies.
This makes much of the talk about book value and comparison with the actual free-standing oil corporations more than a bit off point. Politics and exchange rates are where much of the conversation should center.
If you doubt this, (and you should, as I am just an anonymous voice on a Yahoo board) do yourself a favor and look at the last really great investing opportunity in Petrobras. Pull a max chart and note that the stock went down, dow n, down into late 2002. That was because the market feared (with some justification) what de Silva would do when he became president. And then, lo and behold, he turned out to be reasonable. Combining this with a favorable market for oil and other commodities, the stock went up by 2000% through 2008.
Dilma is, in fact, the terrible , clueless, shareholder-abusing president we worried Lula would be. Until she's replaced there's not much else to talk about with PBR.
Indeed politics and the exchange rate are determinant. Debt is mainly in US$ but crude oil also is expressed in US$ so probably this debt is not such a high risk for them. Also they are so close to a considerable increase of crude oil production: 1 million bpd of new capacity is coming on stream, which means that a turning point is near. They predict to be cash flow positive in 2015 and I believe they can. Today the market recognizes the negatives which I saw coming years ago when I left the stock. Now it is time to look to the future with improving financials and consequently a rising stock. Sentiment right now is extremely negative, the market has given up and does not want to believe that things can improve again. So I am buying.
I was looking at my trading blotter, as I just re-entered PBR below $11 a share. The last activity for me was selling it at $33.211 on 6/10/2011. You are right, PBR should not be allowed to trade on the NYSE, as it is controlled and has been ruined by the govt. of Brazil. These guys will never learn.
Despite the gov't regulation/control PBR has its earnings power discounted by over 50%. If the market were fair, simply base on earnings (as company is still profitable) the stock would be at $20. There is so much pessimist surrounding this stock and price are so depressed compared to earnings - Smart money, Value investors are moving in for the grab as its an easy quick double by next year. You should not of sold Stranger, rather you should of took the short term lost and double back down the lower it goes. In this way your profits would be double by year end.