Petrobras: I Was Wrong, And I'm Changing My Mind (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• One main driver dictates Petrobras' stock price and that is the oil price. Petrobras' stock price and West Texas Intermediate oil prices have a statistically significant correlation coefficient of 0.73.
• I first wrote about Petrobras in January with a sell bias due to concerns about the company's strategy and management's alignment with minority shareholders.
• The stock fell and I believe I got overconfident as I downgraded it into a 'strong sell' almost a month ago based primarily on a bearish outlook of oil prices.
• But with OPEC+'s recent production cuts, and leading signs of a rebound in Chinese manufacturing activity, my view on oil has turned topsy-turvy.
• This leads to revising my view on Petrobras from a 'strong sell' to a 'hold'. I recognize the buy-side of the argument but personally, it is still not a buy as I am uncomfortable with the company's strategy and alignment with minority shareholders.

Read the full article here.