Monday, 01/07/08 Posted 01/07/08,  11:59 pm	(Scroll down to see Jim's comments below)

Today's date:  Monday, 01/07/08
	Dow Jones:	12,827		+ 27
	NASDAQ:		2,499	- 5
	S&P 500:		1,416	+ 4

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Stock Snapshots - Includes all stocks mentioned above

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Jim Cramer's rating on this stock	STOCK SYMBOL	Closing price that day	Opening price next day	Full Company Name/Comments (see comments above for each)
	MO*	77.23	78.12	Altria Group Inc. (MO*)
	VZ	43.35	43.36	Verizon Communications Inc. (VZ)
	BMY	26.04	26.44	Bristol-Myers Squibb Co. (BMY)
	DOW	37.18	37.75	Dow Chemical Co. (DOW)

 

JJC:   I've got an under-covered, under-exposed little Latin American energy play for you...

I am going to say it up front... it is risky.  But the reward could be big...

And the stock is... Petrobras Energia (PZE).  This is not to be confused with its parent company, Petroleo Brasileiro (PBR)...

Now that was confused last month and, in an erroneous report, PZE went up, about a big oil find that should have spiked PBR...  So now it's come back down, and I want to bring it to your attention...

PZE is an oil and gas exploration and production company that's majority controlled by PBR.

PZE operates in Argentina... their biggest country by far... 66% of their production... Venezuela, Peru, Ecuador, Bolivia... that's the rest of their stuff.  These aren't the most stable countries, and not all of them are what you'd necessarily call friendly to capitalism, but the slightest bit of economic liberalization in any of them could send this stock a lot higher...

Look, after the last election in Venezuela, I'm thinking they're going more our way...  I'm not worried about Hugo Chavez (President of Venezuela) picking on them at all, because PZE is a fellow Latin American company, and Chavez, as angry as he is, has a Pan-Latin-American ideology...

PZE also has petro-chemical refining, transport and electricity operations in Argentina, Brazil and Ecuador.  These are developing countries that are putting through infrastructure and PZE's the play. 

.  .  .  .  .

I will not hide the bad here...

PZE is a subsidiary of another company...

In Mad Money, in Cramerica, we tend not to favor subsidiaries... we like the parent... but PBR could pose as a big brother, and help them out with their technological know-how...

They're exposed to the riskier parts of Latin America... more reward... and they're not exploring in Brazil, which is where their parent company is totally kicking butt all over town.

PZE's operating in countries where energy prices have been highly regulated with price controls and export taxes.  That said, high oil is high oil... and even the most confiscatory socialists... can only do so much to eat into PZE's profits.

.  .  .  .  .

The thing that I like most about PZE is that it's under-covered.  Only five analysts are on the stock, with only one - Merrill Lynch - rating it a buy.   Three holds and a sell... That takes out a lot of the risk.  Only Merrill could downgrade it.  The other guys could all upgrade it.  This is an under-the-radar stock, and those always have huge potential to make you the big bucks...

PZE's also seen some signs of improvement in Argentina...  Pricing has gotten stronger, especially in their Argentine refining business...

We're also starting to see demand for Argentine energy companies, which PZE definitely counts as...  Two-thirds of their business is in Argentina... so the Argentine energy sector is heating up.  It could make a comeback.  PZE is a great way to play it... buy, buy, buy!

.  .  .  .  .

Do I like this stock as much as I like PBR?...

No way. 

PZE is far more risky, but most people will write it off as being too risky, because its assets are all in countries where, frankly, we don't really want much exposure...  I think that's wrong though.  It's a new world out here...   It's a new world...  If these countries become the least bit more capitalistic, this stock should soar.

.  .  .  .  .

The Bottom Line!:   Just like they say at another network... you report, I decide... Oh no, they don't say it, they just do it...  Petrobras Energia Participaciones S.A. (PZE) is an energy company that's not for the faint of heart.  But, if you can tolerate the risk, I think it pays off real big, off the pin action of Latin America.

Jim Cramer's rating on this stock	STOCK SYMBOL	Closing price that day	Opening price next day	Full Company Name/Comments (see comments above for each)
	PZE	15.75	16.23	Petrobras Energia Participaciones S.A. (PZE)

 

Go to the LIGHTNING ROUND from tonight's show here >> See current quotes on Yahoo! Finance from tonight's show stocks here >>
Symbol keys: A Charitable Trust stock. - An asterisk next to a stock symbol indicates that Jim mentioned it is a stock that he manages within his charitable trust portfolio.  You can see the complete portfolio of stocks here >> Thumbs up - indicates he would buy the stock or, at the very least, not sell the stock.  We do our best to interpret Jim's opinion on stocks, as we think it is indicated by his comments during the show.  Please read his comments to decide for yourself. Thumbs down - indicates he has said not to buy or to sell the stock, based on his comments  We do our best to interpret Jim's opinion on stocks, as we think it is indicated by his comments during the show.  Please read his comments to decide for yourself. Back up the truck - indicated by Jim, when he says the stock is so good, that he would do a 'mon-back' on the stock... In other words, this is the sound someone would say to a truck driver, "Come on back... " as he is "backing up the truck" to load up on his cargo.  Translation for buying stocks:  This recommendation by Jim indicates that, after you do your own homework on the stock, you should feel comfortable loading up on it, as it is in a good position to be bought at this point. Stumped. - Of the 2,000+ stocks that Jim Cramer has in his head, for which he has an informed opinion, he sometimes comes across a caller with a stock he does not know well enough to opine on...  He then indicates he is stumped and will have to come back to it, after he does some homework of his own on the stock.  This usually occurs during the Lightning Round, when Jim does not know in advance who is calling, or what their stock question is about.
Definitions of key phrases used by Jim, known as "Cramerisms":
	Definition:   'Pull the trigger' is Jim's phrase for making the decision at that point to trade - either to 'buy' or to 'sell' (although he usually uses the phrase for buying), as if to say you should feel comfortable enough to make the final decision without looking back...
	Definition:   'Ring the Register' is Jim's phrase for selling a stock, and making it a final sale, that you should not look back on.  Put it behind you.
	Definition:  'Let It Come In' indicates how you may wait for it to pull back, or have the stock price come down briefly, as your chance (after letting it come in) to buy the rest of your position (i.e., total number of shares you own in that stock).
	Definition:  'backing it up' or 'doing a 'mon-back' is Jim's phrase for the metaphor of backing up a truck to load up on a stock by buying it.  'Mon-back is short for the imaginary worker saying, 'Come on back...' as the truck is backing up to receive its load... Notice that we use the little truck icon to indicate where Jim has mentioned this.  Translation for buying stocks:  This recommendation by Jim indicates that, after you do your own homework on the stock, you should feel comfortable loading up on it, as it is in a good position to be bought at this point.
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