torto

Petrobras Looks More Compelling Than Ever

People are not doing their homework when it comes to PBR. It is actually a net importer of light crude, because it is an integrated oil company and it does most of the light crude refining in Brazil. Before recent discoveries, PBR produced almost only heavy oil and exported it to be refined abroad, and only now it is coming closer to a dollar break even between imports and exports.

So its profit today is due to refining, distribution and exploration in foreign countries ONLY, and was actually hurt by higher oil prices and state subsidizing of gasoline prices. What one must think of when analyzing PBR is oil prices in the next 30 yrs (and ethanol etc.), because the recent spike in oil did nothing but reduce PBR's margins.

P/E may reach 7 if all speculative capital leaves Brazil in the short term but for long term investors it seems me very attractive right now (as Soros does: seekingalpha.com/artic...)