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International Stocks at 52-Week Lows: PBR, BCS, LFC, NOK, MBT
Posted by: gurufocus (IP Logged)
Date: June 23, 2011 05:38PM
As the stock market gave back most of its gains of this year, many individual stocks did much worse and they are making new 52-week lows. In this list we would like to highlight some of the international stocks that are making new 52-week lows. These companies are PetroBras (PBR), Barclays PLC ADS (BCS), China Life Insurance Co. (LFC), Nokia Corp. ADS (NOK). Also you can find the complete list of the international stocks that are traded at 52-week lows. PetroBras (PBR)
Brazil oil giant PetroBras is an integrated company operating in exploration, production, refining, retailing and transportation of petroleum and its byproducts at home and internationally. PBR has a market cap of $124.11 billion; its shares were traded at around $32.13 with a P/E ratio of 8.3 and P/S ratio of 1. The dividend yield of Petroleo Brasileiiro Sa Petrobras stocks is 0.5%. The company had an annual average earnings growth of 20.2% over the past 10 years
Today’s oil price drop certainly did not help PBR’s stock. As oil is down $4 dollars for the day, PBR stock prices lost 2.16% and closed at $32.13. which is within 1% of its 52-week low.
Soros Fund owns 1.1 million shares of Brazil based oil company PetroBras, which is about 0.5% of his portfolio. Soros bought into PBR in the second quarter of 2008, when the oil price was at its highest. As the price crashed, he bought more PetroBras shares at much lower lost. PetroBras became his largest position by the first quarter of 2009. He then gradually reduced the position as the stock price climbed, and sold out in the first quarter of 2010. He bought in the position again in the fourth quarter of 2010.
Petrobras has an ambition to grow into one of the top five integrated oil companies in the world. It already produces nearly two million barrels per day and boasts more than 11 billion barrels of reserves after making some of the largest finds in the world off the Brazilian coast. The government has also granted the company exploration rights in regions that could have billions more in reserves.
The current P/E ratio of 8 is lower than all other oil giants like EXXON Mobil (XOM), and Chevron (CVX). The price/book ratio of PBR is much lower than the others. It is interesting that the market thinks the oil reserve of PetroBras worth less than others.
Barclays PLC ADS (BCS)
UK based Barclays PLC operates in commercial and investment banking, insurance, financial and other related services. Barclays Plc Ads has a market cap of $50.61 billion; its shares were traded at around $16.94 with and P/S ratio of 0.8. The dividend yield of Barclays Plc Ads stocks is 2.1%.
Together with other large banks and brokers, Barcleys’ stock price is traded only at 25% of where it was in at the peak of 2007. The price appreciated to more than $21 in February, but has since retreated to and is making new lows.
Barclays bought most of Lehman Brother’s assets after Lehman went bankrupt in 2008. On June 15 Barclays Chief Executive Bob Diamond, and his management team, hosted a seminar for investors and analysts reiterating the Group’s strategy and financial targets for 2013. The company has a Core Tier 1 ratio of 11%. The increase of this ratio over the last year has been almost entirely due to profits which also enable the company to grow the dividend. Barclays Capital is reducing its credit market exposures, Wealth and Barclaycard are focusing on high return opportunities.
With the recent market jitters, Barclays still advices their clients to stay in course.
China Life Insurance Co. Ltd. ADS (LFC).
China Life Insurance Company Limited is the life insurance company in China's life insurance market. China Life Insurance Co. Ltd. Ads has a market cap of $25.36 billion; its shares were traded at around $48 with a P/E ratio of 20.8 and P/S ratio of 0.4. The dividend yield of China Life Insurance Co. Ltd. Ads stocks is 1.6%. China Life Insurance Co. Ltd. Ads had an annual average earnings growth of 31.5% over the past 5 years.
Chinese stock market has been in decline lately. The year-to-date return is a loss of about 6%. Investors are worried about the rising inflation, housing bubble and economic slowdown. Chinese currency, Yuan, has gained more than 5% in the last 9 months, which hurt the relative performances of Chinese stocks that are traded in the US.
China Life just released its premium income for the first 5 months of the year, which was about RMB 166.5 million. The company just changed its Chinaman and CEO in May. The former Chairman retired.
According to the presentation on the company’s website, the company had a Steady growth of life insurance business with total premiums of RMB 344.15 billion. The company has grown its individual agent channel higher than that of bancassurance business. The company grew its equity by 2.3% in the first quarter of the year.
Nokia Corp. (NOK)
Finland based Nokia is (or was) a key player in mobile communications. Nokia Corp. Ads has a market cap of $23.63 billion; its shares were traded at around $6.02 with a P/E ratio of 7.9 and P/S ratio of 0.4. The dividend yield of Nokia stocks is 6.5%. Nokia Corp. Ads had an annual average earnings growth of 1.3% over the past 10 years.
Nokia stock has been in down spiral. It is now traded only slightly higher than it was at the beginning of 1998. At the stock price of $6 a share, $2 of that is net cash. Nokia is out of favor because it seemed lost in the fierce competition of the wireless communication market. The rapid revenue growth from 2000 to 2007 came to an abrupt end. The company’s revenue has been in decline since 2008.
Nokia’s problem appeared well before its revenue decline in 2007. The company has had consistently declined operation margin, as indicated in GuruFocus’ 10-year financial chart:
The competition in wireless phone industry has eroded the profit margins of the phone makers except Apple (AAPL). With innovative products and marketing, Apple was able to grow its profit margins. Its stock has been one of the best performing stocks in the last decade.
Apparently Nokia does not have the moat that is needed to maintain its profit margins. Warren Buffett has been telling us he likes to buy companies with moat. One of the indications of moats is that the company can maintain its profit margins.
Nokia’s other competitor Research-in-Motion (RIMM) did slightly better, but the profit margin is also in decline:
As a comparison, this is the operating margin of Apple:
Among the three companies, we rather buy Apple instead of the other two.
Here you can find the complete list of the international stocks that are traded at 52-week lows.
Stocks Discussed: PBR, BCS, LFC, NOK,
Re: International Stocks at 52-Week Lows: PBR, BCS, LFC, NOK, MBT
Posted by: DocMoney (IP Logged)
Date: June 23, 2011 11:56PM
I keep looking at PBR but can't shake the fear that Brazilian government may nationalize it some day...
My blog on how to become financially free through investing:
Stocks Discussed: PBR, BCS, LFC, NOK,
Re International Stocks at 52-Week Lows PBR BCS LFC NOK MBT
Posted by: anyroads (IP Logged)
Date: June 24, 2011 06:27AM
At these levels Barclays are cheap.
They are well positioned to take advantage of any upturn in the US economy
Stocks Discussed: PBR, BCS, LFC, NOK,