GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
Petrobras looks cheap against its earnings at 6x forward earnings, versus the roughly 14x oil and gas producers usually get. Applying 14x to next year's estimated $4.14 a share gives a fair range of about $51 to $65, leaving the stock 52% below the low end. The view rests on valuation levels from reported earnings and revenue estimates only, not fundamental work. x.com
Petrobras leads this week's EWT Growth Leaders because of surging earnings and sales in the leading energy group. It ranks #1 with a 91 score and A rating: last-quarter EPS rose 121% year over year, sales 60%, and annual EPS 191%. A breakout above 26.42 or a fourth-wave pullback to 24.3-23.0 offers a setup for a projected fifth wave to 32.8-33.2. x.com
Exceptional buying inflows support the bullish view on Petrobras. About $5 billion flowed in last week, its largest inflow since 2014, as the stock emerged from the 10-year support/resistance flip highlighted this summer. x.com
Low forward earnings multiples alongside strong investor sentiment put these S&P 500 stocks atop the smart-value ranking. APA, Viatris, EOG, Marathon Petroleum, Valero, Phillips 66, Allstate, Diamondback, Everest and Centene trade at 6-15x forward earnings after one-year gains of 17-150%; the accompanying ranking also weighs free-cash-flow yield and momentum. x.com
Brazilian domestic-market companies such as Nu, XP, Itaú, Bradesco, PagSeguro, CSN and Inter stand to benefit from a falling exchange rate, so positioning belongs in the domestic market. The exporters Petrobras and Vale are the ones falling today, which fits that call. The view was laid out in an iProfesional article on which CEDEARs could take off depending on whether Lula or Flávio Bolsonaro wins Brazil's elections. x.com
Occidental Petroleum is mispriced at about 8.4x trailing earnings and an 8.7% free cash flow yield during an oil shock. Eight times earnings in an oil shock is not a valuation but a clerical error with a ticker symbol. Iran cannot beat the US Navy, so it is waiting out America's vote in 49 days, since Iran does not vote until 2028; owning Occidental beats hiding in Treasuries. x.com
Par Pacific Holdings, a refiner, is a new addition as the portfolio itself gets refined. x.com
Kosmos Energy probably deserves to trade higher because its gas production is priced as a percentage of Brent and growing, a substantial tailwind that leaves it highly geared to the oil strip. With its development program, effective oil reserve life is probably closer to 10 years than 7. Fair value works out to around $4 a share, with a wide range of outcomes. The risk is $2.5 billion of debt at an E&P with declining production and 18 months of lean capex. x.com x.com x.com x.com x.com
Repsol's Q1 net income of $1 billion supports the bullish case. x.com
PrimeEnergy trades around 6x normalized earnings because its reserve life is a huge unknown: about five years of proven reserves plus three more years of identified drilling, with little visibility beyond. It will probably outperform that long term, but near term it is mostly oil beta, with intermittent, unpredictable alpha. Better gas pricing once more takeaway capacity is online would help, since it gets only $0.75 for natural gas, and liquids output nearing 2 million barrels de-risks opex. … Show more
Exxon's stock is pricing the screen, not its sworn 8-K disclosure that Q2 earnings will be about $5 billion above Q1. The July 7 filing attributes $3.5-3.9 billion to higher crude and $3.3-4.1 billion to refining and chemicals, less about $1 billion of war disruption. Yet Exxon closed at $145.09, ten dollars below its war peak. x.com x.com
