Petroleo Brasileiro SA Petrobras (PBR.A): 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.A) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day down 0.6%. By the end of trading, Petroleo Brasileiro SA Petrobras fell 42 cents (-2.4%) to $17.43 on light volume. Throughout the day, 6.7 million shares of Petroleo Brasileiro SA Petrobras exchanged hands as compared to its average daily volume of 9.9 million shares. The stock ranged in price between $17.42-$17.78 after having opened the day at $17.75 as compared to the previous trading day's close of $17.85. Other companies within the Basic Materials sector that declined today were: TOR Minerals International ( TORM), down 14.1%, Kimber Resources ( KBX), down 13.6%, Noranda Aluminum ( NOR), down 11.7%, and Parker Drilling Company ( PKD), down 10.3%.
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Petroleo Brasileiro S.A. operates as an integrated oil and gas company in Brazil and internationally. Petroleo Brasileiro SA Petrobras has a market cap of $120.86 billion and is part of the energy industry. The company has a P/E ratio of 7.1, below the S&P 500 P/E ratio of 17.7. Shares are down 4% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Petroleo Brasileiro SA Petrobras as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and poor profit margins.

On the positive front, WSP Holdings ( WH), up 85%, BMB Munai ( BMBM), up 42.2%, Berry Petroleum ( BRY), up 19.3%, and Silver Bull Resources ( SVBL), up 10.9%, were all gainers within the basic materials sector with Agnico-Eagle Mines ( AEM) being today's featured basic materials sector leader.

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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