Digging for PetroChina (PTR)

Stock of the Day
PetroChina Co. Ltd.

Monday’s Intra-day Price: PTR – $123.38

I am going to stay on the China bandwagon with PetroChina, the leading company in that country with a broad range of petroleum-related activities, including: the exploration, development and production of crude oil and natural gas; refining, transportation, storage and marketing, including import and export, of crude oil and petroleum products; production and sale of chemical products; and the transmission, marketing and sale of natural gas.

020507_ptr_weekly_sm.png

Warren Buffet has more than a $1 billion stake in this company through Berkshire Hathaway and according to reports, holds more than 9 percent of the publicly traded shares. The reports I am referring to came out in 2003 (see monthly chart below), when PTR was trading much lower (showing why he is the greatest investor ever). It never hurts to have Buffet on your side!

PTR has been screened on the MSW daily screens several times over the past 12 months but it was never added to the MSW Index or placed in the portfolio. I can’t take credit for any of the gains over the past couple of years but I would like to be part of any gains that may take place in the future.

The stock is currently forming a consolidation pattern above the 200-d moving average, similar to the support it received three times over the past two years (see the chart). If the stock can maintain support, the current trading range will become the next buying opportunity. The recent declines were logged in as distribution but the stock was also catching support during those down-weeks.

Sector: Oils/Energy
Industry: Integrated Oil and Gas
52 Wk Range $89.85 – $142.60

Stat: Value of $10,000 invested five years ago: $86,982 today

Held by Institutions: 11%
Money Market: 202
Mutual Fund: 71
Other: 13
2.2 million more shares were bought then sold last reporting period.
This equaled a $300 million difference in money transfer to the positive side.

Top Holder: FMR Corporation (Fidelity Management & Research Corp.)
4.5 mil Shares for < 0.01% of Portfolio ($566 million value) Total Equity Value of Portfolio: $618.0 billion (more than half of $1 trillion) Key Fundamental Numbers:
Market Cap.: $21.8B
Outstanding Shares: 175.82M
Short Ratio: 2.20
Net Income $M: 17,036M
ROA (%): 19.7
ROE (%): 29.61
P/E (TTM): 13.4
P/E (Forward): 11.44
Price to Sales Ratio: 0.32
Price to Cash Flow: 1.27
Book Value per Share: 319.12
PEG Ratio: 0.70
Price to Book Ratio: 0.39
Cash Flow per Share: 96.89

3-Year Sales Rate: 30.89%
3-Year Net Income: 44.25%

020507_ptr_mthly.png

Earnings:
Estimated Earnings (2006): 10.93
Yearly (2005): 9.29
Yearly (2004): 7.13
Yearly (2003): 4.83
Yearly (2002): 3.26

Revenue (millions):
Yearly (2005): 552,229
Yearly (2004): 388,633
Yearly (2003): 303,779
Yearly (2002): 244,424

Net Income:
2005: 139,642
2004: 102,927
2003: 69,614

Cash Flow:
2005: 190,947
2004: 149,338
2003: 110,145

Is this just the beginning of the possible 10-bagger run or the top of the Chinese bust that some are talking about? I learn towards the former but will look for corrections to grab shares.

Comments

  1. Terry Zink says:

    This looks like an opportune to buy shares. Has PTR found support? The May high is 120.21, while the Jan/Feb low is 120.22, 1 cent above that. This looks like a textbook case of resistance becoming support.

    Of course, that could be a little too obvious. It might be worth picking up a few shares with a stop not too far below 120.

Trackbacks

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