An option on probable huge value
Only for the third time in its history, HRT is trading below its cash balances. I would recommend to go long, if you can bear the risks of holding a company with these characteristics (it produces net losses and is expected to do so until 2015).
Foolish bottom line
The three companies named above operate in the same sector and in the same country, but they are all extremely different. While Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) is ameliorating fast from an operational standpoint and owns huge off-shore reserves, the company is controlled by the government. Governments don’t always have the same objectives as private shareholders. Braskem SA (ADR) (NYSE:BAK) is the only company that looks cheap and ready to benefit from a depreciating local currency. On the other hand, HRT is a very cheap option with a market capitalization equal to the company’s net cash.
The article Brazilian Oil: Roadmap Into 2014 originally appeared on Fool.com and is written by Federico Zaldua.
Federico Zaldua has no position in any stocks mentioned. The Motley Fool recommends Petroleo Brasileiro (NYSE:PBR) S.A. (ADR). Federico is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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