Petrobras

01/05/2015 2:17 pm EST

Focus: COMMODITIES

Most commodities are now at some of the lowest prices in their history of being in business, and therefore, very unpopular among analysts, explains value investor Russ Kaplan, editor of Heartland Advisor.

Yes, oil prices are down, but I don't expect them to stay down. As usually happens when the price of something falls or rises sharply, analysts expect that trend to continue.

When oil hit $145 per barrel, predictions came in for a rise to $300. It came nowhere close to that. In fact, $145 was close to the all time high.

Oil has plunged 38% in the last five months and analysts are now outbidding themselves to predict what the low will be. It may go lower, but I believe it will go up in the future. 

For those of a more speculative bent, a good selection is Petrobras (PBR), which is also in the oil industry.

Petrobras is headquartered in Brazil. It was founded in 1953 as a monopoly of the Brazilian government. It has been partially deregulated, but the Brazilian government owns the majority of the shares, and thus, still has control.

The danger with this company is that government control has resulted in a significant amount of corruption. In addition, a Socialist-leaning President, Dilma Rouseff, who was just reelected, runs the country.

If the company is able to overcome all of these problems, it could be a risky, but profitable play as the price of oil goes back up.

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