Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, South American oil giant Petroleo Brasileiro
With that in mind, let's take a closer look at Petrobras' business and see what CAPS investors are saying about the stock right now.
|Headquarters (Founded)||Rio de Janeiro (1953)|
|Market Cap||$167.9 billion|
|Industry||Integrated oil and gas|
|Trailing-12-Month Revenue||$126.3 billion|
|Management||CEO Jose de Azevedo (since 2005)
CFO Almir Barbassa (since 2005)
|Return on Equity (Average, Past 3 Years)||15.4%|
|Cash/Debt||$29.6 billion / $79.0 billion|
Sources: S&P Capital IQ and Motley Fool CAPS.
Just last week, DCUDFlyer nicely summed up the Petrobras bull case: "Seems like a good entry point for a rock solid, cheap oil company. Brazil + oil + PE~8, dont mind if I do. Going long."
Petrobras even boasts a robust operating margin of 21%. That's much higher than that of other integrated oil giants such as BP (8%), Chevron (16%), and Exxon (13%).
CAPS member NJ7 elaborates on the opportunity:
Petrobras=offshore holdings. It's that simple. Petrobras investors like me are ultimately waiting for the company to fully tap those huge reserves. This will require huge amounts of capital and accident avoidance despite the dangers of deep-water drilling. Governmental limits on domestic oil prices are also an issue. But when these reserves are tapped, I could see Petrobras reaching $60 dollars a share like other large multinational oil corporations, and increasing its dividend substantially. The question is, how long will it take and at what cost will it tap those reserves? Debt will be a reality, and a weak currency has increased those debt costs.
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