EKS, With more backup this time, I will give again the ruling reason for buying PBR now.
You can buy PBR at a stock price now that equals the stock price BEFORE any of the massive PBR Brasilian off-shore discoveries were announced.
Current stock price: $45.42
Price before the first big announcement: Nov 7, 2007: $46.27
Closing price on day of first big announcement: Nov 8, 2007: $58.26
OTOH,
1. There's been some rumors that insiders were big buyers of the stock before the announcement, and some or a lot of that had already brought the stock up higher by Nov 7 to the $46 area.
2. We know with more certainty now (vs. 11/'07) that the oil is actually there. That's a positive. Otoh,we also knew then and now even if the oil were there, it would take several years, billions of dollars, and tremendous expertise to lift "large" quantities of oil from the fields. And thus, we knew/know that the share price of Petrobras could/would fluctuate until the oil revenue stream was more assured. One could've guessed there'd be no hurry to jump into the stock after the announcement. --- And so, maybe there's no hurry now.
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It's possible that Lula will disappoint PBR shareholders with his proposals to increase the government's share. OTOH though, those proposals have to wend their way through Brasil's elected representatives. Right now, with PBR's current stock price, one could almost conclude that PBR stock now gives very, very little weight to the enormous off-shore finds Petrobras has announced subsequent to Nov 7,2007.
Imo PBR is now a buy for both short-term traders and for longer-term holders. |
