Agree. just dipped my toe in with buy/write jan 15 call net debit $1180.00. Out at $1,500 27% in 6 months with 4% downside protection... p/e 8..peg .82 book value $25.26, $3.50 cash per share... doesn't look like too much more downside risk here. seems like good risk reward
1. they can not satisfy the domestic demand and therefore they have to import gasoline paying in hard currency and brazilian government is forcing them to sell that fuel below their cost and that translates into billions in losses
2. Opening of the new refinery has been delayed yet again until 2016 and with increased demand their losses will be staggering
3. Brazilian government is using PBR as their personal ATM machine forcing them to spend 100's of millions of $$ in "public" projects that have nothing to do with oil industry, such as spending 200 million to build a soccer stadium
4. By the years end Petrobras will be in debt in tune of 120 + billion
5. Year over year their production has fallen by around 5%
6. Last year they all of a sudden decided to cancel the dividends for completely p off institutional investors. they did reinstate the dividends this year but no one trusts these lunatics any more
7. Political unrest in Brazil will prevent further gasoline price increases and PBR will be stuck with losses for years to come. The estimate is that they need to increase fuel prices at the pump by up to 30% just to break even
8. Assets that PBR has are real and vast however they are super expensive to exploit and it will take years til' they realize their full potential. LOOKING AT THEIR TRACK RECORD THAT WILL NEVER HAPPEN.
9. PBR leadership is appointed via political favors not by their competence and proven track record
10. They are greedy, lazy, stupid and incompetent
11. Institutional investors already know that 2Q will be horrific and are selling like crazy.
12.Creative accounting taken to new heights in quarterly reports (ENRON put to shame)
PBR HAS 0 value - this company will go bust or as some say nationalized (same thing)