Trade-Ideas LLC identified

Petroleo Brasileiro SA Petrobras

(

PBR

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Petroleo Brasileiro SA Petrobras as such a stock due to the following factors:

  • PBR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $175.0 million.
  • PBR has traded 170,436 shares today.
  • PBR is down 3.8% today.
  • PBR was up 7.2% yesterday.

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More details on PBR:

Petroleo Brasileiro S.A. - Petrobras operates as an integrated energy company in Brazil and internationally. PBR has a PE ratio of 3. Currently there are no analysts that rate Petroleo Brasileiro SA Petrobras a buy, 3 analysts rate it a sell, and 5 rate it a hold.

The average volume for Petroleo Brasileiro SA Petrobras has been 30.9 million shares per day over the past 30 days. Petroleo Brasileiro SA Petrobras has a market cap of $35.2 billion and is part of the basic materials sector and energy industry. Shares are up 25.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Petroleo Brasileiro SA Petrobras as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from the ratings report include:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, PETROLEO BRASILEIRO SA- PETR underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Net operating cash flow has decreased to $6,147.00 million or 40.62% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, PETROLEO BRASILEIRO SA- PETR has marginally lower results.
  • PBR is off 8.07% from its price level of one year ago, reflecting the general market trend and ignoring their higher earnings per share compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Currently the debt-to-equity ratio of 1.73 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, PBR's quick ratio is somewhat strong at 1.24, demonstrating the ability to handle short-term liquidity needs.
  • PBR, with its decline in revenue, slightly underperformed the industry average of 34.7%. Since the same quarter one year prior, revenues fell by 40.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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