Petroleo Brasileiro SA Petrobras (PBR): Today's Featured Basic Materials Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Petroleo Brasileiro SA Petrobras ( PBR) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day down 1.6%. By the end of trading, Petroleo Brasileiro SA Petrobras fell 86 cents (-3.8%) to $21.99 on average volume. Throughout the day, 11.5 million shares of Petroleo Brasileiro SA Petrobras exchanged hands as compared to its average daily volume of 12.6 million shares. The stock ranged in price between $21.87-$22.36 after having opened the day at $22.35 as compared to the previous trading day's close of $22.85. Other companies within the Basic Materials sector that declined today were: Cal Dive International ( DVR), down 12.2%, E.I. du Pont de Nemours & Company ( DD), down 9.1%, Dejour Energy ( DEJ), down 8.9%, and Alon USA Energy ( ALJ), down 8.4%.
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Petroleo Brasileiro S.A. primarily engages in oil and natural gas exploration and production, refining, trade, and transportation businesses. Petroleo Brasileiro SA Petrobras has a market cap of $148.71 billion and is part of the energy industry. The company has a P/E ratio of 7.4, below the average energy industry P/E ratio of 13 and below the S&P 500 P/E ratio of 17.7. Shares are down 7.4% year to date as of the close of trading on Monday. Currently there are four analysts that rate Petroleo Brasileiro SA Petrobras a buy, no analysts rate it a sell, and six rate it a hold.

TheStreet Ratings rates Petroleo Brasileiro SA Petrobras as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).

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