Trade-Ideas: Petroleo Brasileiro SA Petrobras (PBR) Is Today's Pre-Market Leader Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Petroleo Brasileiro SA Petrobras ( PBR) as a pre-market leader 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 $288.4 million.
  • PBR traded 40,529 shares today in the pre-market hours as of 9:01 AM.
  • PBR is up 2.2% today from Friday's close.

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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 5. Currently there are 2 analysts that rate Petroleo Brasileiro SA Petrobras a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Petroleo Brasileiro SA Petrobras has been 46.0 million shares per day over the past 30 days. Petroleo Brasileiro SA Petrobras has a market cap of $56.4 billion and is part of the basic materials sector and energy industry. Shares are up 14.4% year-to-date as of the close of trading on Friday.

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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, generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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, PETROLEO BRASILEIRO SA- PETR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio of 1.31 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, PBR's quick ratio is somewhat strong at 1.09, demonstrating the ability to handle short-term liquidity needs.
  • Looking at the price performance of PBR's shares over the past 12 months, there is not much good news to report: the stock is down 41.55%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • PETROLEO BRASILEIRO SA- PETR's earnings per share declined by 17.6% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PETROLEO BRASILEIRO SA- PETR swung to a loss, reporting -$1.12 versus $1.70 in the prior year. This year, the market expects an improvement in earnings ($1.61 versus -$1.12).
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 18.3% when compared to the same quarter one year ago, dropping from $2,280.00 million to $1,862.00 million.

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