BP and Petrobras show unpriced positive sentiment
The guest argues that BP and Petrobras are undervalued opportunities because their strong upward shifts in executive sentiment have not been matched by their stock price returns.
The argument
European and non-US oil companies have historically been discounted by investors, but textual analysis of their earnings calls reveals highly positive internal outlooks regarding sales, margins, and cash that the market is ignoring.
The thesis, stress-tested
✓ What validates it
- ✓BP or Petrobras report strong cash flow and margin expansion in next quarterly earnings
▸ Risks discussed
- ▸European regulatory headwinds persist for oil and gas companies
- ▸Oil price volatility dampens actual earnings regardless of executive optimism
Hear it yourself
"When they borrow that stock, the borrow availability, obviously, will come down. Before any sell order is placed, sell short order is placed, there needs to be a borrow that is associated with that. So in effect, the larger hedge funds are telegraphing what it is they wanna do a day prior to to doing it. What we have is a feed from our prime broker on borrower availability as well as the fee for that borrower. So by looking at the day to day change or even at a higher frequency, a change in the fee or a change in the borrow availability, we can see what the buy side is doing. I mean,"
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