Rotten Tomato Stocks
No Result
View All Result
  • News
    Average Long-Term U.S. Mortgage Rates Edge Down to 5.25%

    Average Long-Term U.S. Mortgage Rates Edge Down to 5.25%

    Oil slumps as fears over economic growth take center stage

    Oil slumps as fears over economic growth take center stage

    Here’s what just happened that triggers stock market drops 71% of the time, warns Credit Suisse

    Here’s what just happened that triggers stock market drops 71% of the time, warns Credit Suisse

    Asian Shares Advance Despite Losses on Wall Street

    Asian Shares Advance Despite Losses on Wall Street

  • NYSE
    Is China Yuchai International (NYSE:CYD) Using Too Much Debt?

    Is China Yuchai International (NYSE:CYD) Using Too Much Debt?

    Berkshire Hathaway Inc. Cl B stock falls Thursday, underperforms market

    Berkshire Hathaway Inc. Cl B stock falls Thursday, underperforms market

    Archer Aviation (NYSE:ACHR) Shares Down 5.7% After Analyst Downgrade

    Archer Aviation (NYSE:ACHR) Shares Down 5.7% After Analyst Downgrade

    Target’s stock sinks toward worst day since Black Monday

    Target’s stock sinks toward worst day since Black Monday

  • NASDAQ
    Cisco, Travelers share losses contribute to Dow’s 75-point drop

    Cisco, Travelers share losses contribute to Dow’s 75-point drop

    Ross Stores Shares Tumble 17% on Declining 1Q Sales, 2Q Sales Forecast

    Ross Stores Shares Tumble 17% on Declining 1Q Sales, 2Q Sales Forecast

    Enanta Pharmaceuticals (NASDAQ:ENTA) Shares Gap Down After Analyst Downgrade

    Enanta Pharmaceuticals (NASDAQ:ENTA) Shares Gap Down After Analyst Downgrade

    Federal Agency Sends Team to Probe Tesla Crash That Killed 3

    Federal Agency Sends Team to Probe Tesla Crash That Killed 3

  • OTC
    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    Corus Entertainment 4Q Profit Falls

    Corus Entertainment 4Q Profit Falls

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

  • TSX
    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    Bitcoin Is Falling: Should You Buy the Dip?

    Bitcoin Is Falling: Should You Buy the Dip?

    CN Rail Stock Is So Undervalued That it’s Absurd

    CN Rail Stock Is So Undervalued That it’s Absurd

  • News
    Average Long-Term U.S. Mortgage Rates Edge Down to 5.25%

    Average Long-Term U.S. Mortgage Rates Edge Down to 5.25%

    Oil slumps as fears over economic growth take center stage

    Oil slumps as fears over economic growth take center stage

    Here’s what just happened that triggers stock market drops 71% of the time, warns Credit Suisse

    Here’s what just happened that triggers stock market drops 71% of the time, warns Credit Suisse

    Asian Shares Advance Despite Losses on Wall Street

    Asian Shares Advance Despite Losses on Wall Street

  • NYSE
    Is China Yuchai International (NYSE:CYD) Using Too Much Debt?

    Is China Yuchai International (NYSE:CYD) Using Too Much Debt?

    Berkshire Hathaway Inc. Cl B stock falls Thursday, underperforms market

    Berkshire Hathaway Inc. Cl B stock falls Thursday, underperforms market

    Archer Aviation (NYSE:ACHR) Shares Down 5.7% After Analyst Downgrade

    Archer Aviation (NYSE:ACHR) Shares Down 5.7% After Analyst Downgrade

    Target’s stock sinks toward worst day since Black Monday

    Target’s stock sinks toward worst day since Black Monday

  • NASDAQ
    Cisco, Travelers share losses contribute to Dow’s 75-point drop

    Cisco, Travelers share losses contribute to Dow’s 75-point drop

    Ross Stores Shares Tumble 17% on Declining 1Q Sales, 2Q Sales Forecast

    Ross Stores Shares Tumble 17% on Declining 1Q Sales, 2Q Sales Forecast

    Enanta Pharmaceuticals (NASDAQ:ENTA) Shares Gap Down After Analyst Downgrade

    Enanta Pharmaceuticals (NASDAQ:ENTA) Shares Gap Down After Analyst Downgrade

    Federal Agency Sends Team to Probe Tesla Crash That Killed 3

    Federal Agency Sends Team to Probe Tesla Crash That Killed 3

  • OTC
    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    Corus Entertainment 4Q Profit Falls

    Corus Entertainment 4Q Profit Falls

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

  • TSX
    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    Bitcoin Is Falling: Should You Buy the Dip?

    Bitcoin Is Falling: Should You Buy the Dip?

    CN Rail Stock Is So Undervalued That it’s Absurd

    CN Rail Stock Is So Undervalued That it’s Absurd

No Result
View All Result
Rotten Tomato Stocks
No Result
View All Result

Why You Should Watch the World’s Most Hated Oil Company

Editorial Staff by Editorial Staff
July 8, 2021
0
Why You Should Watch the World’s Most Hated Oil Company

If you invested in Petrobras (NYSE: PBR) during the days of $150 oil and never sold, you lost your shirt — and probably lost patience with any Brazil-related stock. Collapsing oil prices during the 2008-09 Great Recession, coupled with a massive bribery scandal involving the oil firm, sucked the value right out of Brazil’s resident fossil fuel giant. But after years of mistrust, new leadership, and class action lawsuits, happier days are here again. After three months of gains, can Petrobras keep heading higher from here? Here’s what you need to know once you add this to your watch list.

3 reasons to fill up on Petrobras

First, Petrobras has strong fundamentals backing it up. Brazil’s government supports fossil fuels, and Petrobras owns most of the deep-water oil fields off Brazil’s Atlantic Coast. It’s in charge of nearly all of Brazil’s natural gas production and distribution. Brazil mixes sugarcane ethanol with its gasoline – and Petrobras owns nine ethanol plants .

It’s also shedding more bad skin. Class action lawsuits revolving around the bribery schemes known in Brazil as the Car Wash scandal are behind it. On July 1, Petrobras sold its remaining stake in its gas station company, BR Distribuidora, raising around $2.3 billlion . After years as the most indebted oil company in the Americas, Petrobras is paying dividends again, and this sale helps keep its roughly 3.2% yield in place. (For contrast, Colombian oil and gas company EcoPetrol (NYSE: EC) yields 0.63%; ExxonMobil (NYSE: XOM) is 5.52%.)

Second, Brazil’s oil and gas demand is coming back. Exports are up, as Oilprice.com reported on June 28. Reuters notes that Chinese oil importers love the company ; they’ve partnered up with Petrobras on multiple lucrative projects

Third, Brazil is clawing back from its worst days of the COVID-19 pandemic, with zero new cases and zero new deaths reported on both June 29 and June 30. As Brazil returns to normal, there will be more demand for Petrobras oil and natural gas.

The market has been pricing in this good news for weeks now. Petrobras looks strong — maybe too strong for some value-minded investors who see the company at its highest price in a year.

But long-term investors who don’t want to spend a lot of money on energy stocks will definitely like the idea of the commodity super-ish cycle. Oil and timber prices are rising. And still, much of the Western world is facing some sort of economic lockdown. That isn’t going to last forever, so investors believe demand for fuel will increase to power economies that finally start firing on all eight cylinders.

But investors who want exposure to global value and key commodities like oil and gas will have to pay attention to Petrobras’s price to get the most out of any potential investment.

Why you should wait for a pullback

Petrobras has been trading between roughly $8 and $12 per share since 2016. It slipped to $5 during the beginning of the pandemic in March 2020. In 2018 and 2019, when the U.S. and Brazilian economies were doing very well, the stock hit as high as $16. At current prices of around $11, Petrobras still trades around the high end of its five-year range — and a lot of its fortunes will depend on global oil markets. If they look bullish, so will Petrobras.

Given its historical performance, buying Petrobras under $10 a share may be your safest bet for a long-term holding. You will need to watch oil markets when it is trading over $12 to see whether investors are convinced oil is going higher. If oil looks like a dud, then Petrobras could easily peter out, making a $12 buy pretty pricey.

Political risk will keep it cheap

We know strong oil and weaker Covid provide great tailwinds for Petrobras. But next year’s elections could create serious headwinds, too.

Incumbent president Jair Bolsonaro faces an uphill battle. At least for now, political observers believe he’ll lose his reelection bid to former president Luiz Inacio “Lula” da Silva. Sadly, Lula is the poster boy of Operation Car Wash, the name given by Brazil’s version of the FBI to the Petrobras bribe schemes. And while it is highly unlikely that such fraud would begin again , given public pressure against such corruption and all the near-fatal lawsuits Petrobras endured in the scandal’s wake, the market could easily crush Petrobras if it thinks Lula will win.

If so, consider that another opportunity to build your Petrobras war chest. If Petrobras falls to single digits, big Wall Street emerging market funds might start buying. And if history’s any guide, Petrobras tends to recover from single digits in time.

Can Petrobras be a $15 stock again like in 2018-19? I’d argue yes. Solid oil and gas prices and COVID-19 recovery should help Brazil’s economy bounce back, strengthening its currency and likely pushing Petrobras share prices higher.

Unless you believe oil and gas will go the way of the wooden windmill, and Brazil will never heal from COVID, (and what Fool believes that?) then Petrobras is a must watch. Keep an eye out for general sell-offs, and be leery of investing at any price over $12 unless oil is approaching $100 and COVID talk dissipates globally.

Related Posts

Average Long-Term U.S. Mortgage Rates Edge Down to 5.25%
News

Average Long-Term U.S. Mortgage Rates Edge Down to 5.25%

May 20, 2022
Oil slumps as fears over economic growth take center stage
News

Oil slumps as fears over economic growth take center stage

May 19, 2022
Here’s what just happened that triggers stock market drops 71% of the time, warns Credit Suisse
News

Here’s what just happened that triggers stock market drops 71% of the time, warns Credit Suisse

May 18, 2022
Asian Shares Advance Despite Losses on Wall Street
News

Asian Shares Advance Despite Losses on Wall Street

May 17, 2022
Load More
Next Post
Trump Files Suit Against Facebook, Twitter and YouTube

Trump Files Suit Against Facebook, Twitter and YouTube

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

POPULAR NEWS

CNH Industrial (NYSE:CNHI) Use Of Debt Could Be Considered Risky

CNH Industrial (NYSE:CNHI) Use Of Debt Could Be Considered Risky

April 14, 2021
10 Warning Signs That Should Tell You “This Stock is in Trouble”

10 Warning Signs That Should Tell You “This Stock is in Trouble”

November 11, 2019
Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

September 14, 2021
CN Rail Stock Is So Undervalued That it’s Absurd

CN Rail Stock Is So Undervalued That it’s Absurd

May 2, 2021
Nektar, worst performing stock in S&P 500, gets booted from the index

Nektar, worst performing stock in S&P 500, gets booted from the index

November 12, 2019

EDITOR'S PICK

JD.com (NASDAQ:JD) Shares Down 5.4% on Analyst Downgrade

JD.com (NASDAQ:JD) Shares Down 5.4% on Analyst Downgrade

March 9, 2022
Is Hanesbrands (NYSE:HBI) Using Too Much Debt?

Is Hanesbrands (NYSE:HBI) Using Too Much Debt?

October 26, 2021
Stocks Edge Lower as Wall Street Prepares for Earnings

Stocks Edge Lower as Wall Street Prepares for Earnings

October 12, 2021
Vizio Swings to 1Q on Decline in Device Sales

Vizio Swings to 1Q on Decline in Device Sales

May 13, 2022

Stay Updated

Get breaking news delivered straight into your inbox

Nothing in this publication should be considered as personalized financial advice. We are not licensed under securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. Please consult a licensed financial advisor before making any investment decision. This is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Rotten Tomato stocks is a wholly-owned subsidiary of Grainne Capital Limited.
While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

Rotten Tomato Stocks cover the companies and markets that are declining, failing or headed for disaster. We help investors spot the down tends and recognize when something smells rotten.

RECENT POSTS

Average Long-Term U.S. Mortgage Rates Edge Down to 5.25%

Is China Yuchai International (NYSE:CYD) Using Too Much Debt?

Berkshire Hathaway Inc. Cl B stock falls Thursday, underperforms market

POPULAR POSTS

Archer Aviation (NYSE:ACHR) Shares Down 5.7% After Analyst Downgrade

Cisco, Travelers share losses contribute to Dow’s 75-point drop

Ross Stores Shares Tumble 17% on Declining 1Q Sales, 2Q Sales Forecast

© Copyright 2021 RottenTomatoStocks. All Rights Reserved 

Disclaimer | Privacy Policy

No Result
View All Result
  • HOME
  • NEWS
  • NYSE
  • NASDAQ
  • OTC
  • TSX

© 2021 RottenTomatoStocks.com

error: Content is protected !!
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.