there is a potential to increase the debt, the pushing out of the debt maturity is something that has been long expected and refinancing it at a lower rate is great and a cost savings at around $9-11M annually IS commendable, but I take this as a sign that they are going to be increasing debt further regardless of maturity.
Furthermore, the B2 rating by moody's implies a 30% default rate, so a stock with a 30% default for those maturity metrics does not deserve to trade at almost twice book value... until they are profitable and distributing their cash flow to a dividend then I do not see this as a valuable investment AT THIS PRICE... at 6-7 per share sure, and even 7-8 was a great purchase... but this has come a long way since then and I think this is going to be a classic example of buy the rumor sell the news as we will see it track back down to the 9-10's until the next catalyst hits
Now I know the utilization has been improving and earnings estimates are higher but there has been no talk of a dividend or anything in the future and instead they are taking the opportunity to raise more debt at what I perceive to be a high interest rate. If their cost of debt is almost 10% that would mean they would need a return on capital of 15-16% in order for me to see it as a good deal... That is an aggressive call for that amount of debt and I take this as a near term bearish sign until pes can prove
To me that they are going to be legitimately profitable. Co-mingle that with oil being at highs due to a Ukraine conflict and this stock is set to pull back with bearish oil estimates that ultimately if comes to fruition will eat into their bottom line and delay profitability.
Good luck. Just my two cents.
which of course if meaningless if you are holding for 3-5 years... but you get the idea.
possible, not saying it isn't but I think from watching PES it usually jumps as such after earnings then the chart and volume break and it goes down 10-20% in a hurry.
I mean profits will probably be down a bit... but question is how much, and guidance... they are predicting negative cash flow until 2016... so any upside to that could be a blowout to the upside in the share price right?
HOw low can this go? I mean FSLR got tanked a couple years ago and came roaring back when things started looking better again.
by the looks of it looks like earnings is coming 8 am new york time on the 26th? so technically after market close on the 25th.. but misleading because not on the 25th... google pbr investor relations you'll see
Why didn't people bash brazil 3 or 5 years ago? They didn't have the same currency issues and emerging markets were booming... now that there are currency issues and refining losses and government issues, the stock needs to sell off before it can reverse itself to the mean.. that will happen, it is a matter of when, not IF.
The only major concern from me is the continuing debt issuances and rising debt levels, but they are based around astronomical business potential.
The corporate governance needs to be straightened out a bit and the political turmoil and emerging market sell of have created an opportunity.
The longs may be early to the show, but a true long does not care about a stock going down to 6-8 bucks if it will go to 30-40 long term.
For dividend investors ... check out PBR/A to get 1% in the mean time... that's almost half the treasury yield, plus the upside on the shares of a double... I'll take that chance. Will you?
it would make more sense to upgrade this int he 7's or 8's when it was cheaper, not after... anyway, usually a sign that a bust is coming and the chart breakout will slowdown or break back down... this is just an opinion after watching PES for sometime.
in a scenario where brazil wants to take over? what would happen? would they buy out the shares?
Do you have any good articles that you can reference their purchases?
So the S&P report I read says the brazilian government owns 50% or so... now the stock is traded publicly...
YOu are saying that they would need to buy out the company on the open market?
Could there ever be a freddie mac type scenario where they literally wiped it out and made it worth nothing?
I am new to PBR, mind giving me some further background on the selloff as of late and why it is getting hammered? I am doing some research as we speak.
Also, are you a close follower, the brazilian govt. owns 50.3% voting rights, does this mean there is risk for nationalization? what is the true risk of this and the stock getting wiped? Thanks.
Is there any true risk of this? Obviously this isn't a freddie mac and they are making money and what not... but what is the true risk of this getting wiped out and nationalized?
let's be honest, the earnings on PES right now are not really justifying the current valuation, there is some value here but earnings misses, bearish forecasts on oil markets and the looming backdraft that could swing into the market leave room for downside... I see the upside here capped significantly.
the Range is evident to anyone who is following the stock for a while now. I think for an IRA/long term holding you can hold and ride out the fluctuations, though they aren't paying you with a yield like a PDS or some other in the sector... they should pay you with capital appreciation... they will eventually... but I am afraid not right now.
If you do not buck the trend and be mindful of it in short term swings you will get burned.
For right now in my fair opinion this can easily see 7 if not mid 6's and lower again... especially with all the bearish forecasts on Oil right now...
Good luck to all, I am not long PES at these levels, I wish you the best.