Brazilian oil giant Petroleo Brasileiro S.A., aka Petrobras (PBR Quick QuotePBR - Free Report) recently tasted partial success when it succeeded to persuade the U.S. Court of Appeals to annul the certification of a class of investors. The state-owned company has been accused of money laundering. Petrobras claimed that whether the investors had conducted transactions in U.S., could not be ascertained which was a necessary prerequisite for the certification.

The court now needs to redefine the group of investors who can sue Petrobras. Notably, the company is grappling with huge debt and is also embroiled in Brazil's latest corruption scandal.

Numerous lawsuits have been filed against the company due to its involvement in multibillion-dollar money laundering scandal. Various senior executives of the company have been accused of taking bribes for inflated contract schemes and were arrested as part of the Operation Car Wash investigation.

In Feb 2016, district court announced that two classes of plaintiffs – shareholders and bondholders can claim to recover their losses. The U.S. Court of Appeals reversed some aspects of the district court’s ruling of the class certification order and remanded the matter for subsequent hearings. It decertified the previous order as it believed that the latter did not consider whether the occurrence of domestic transactions could be determined through a common set of evidence. This came as a major setback for the investors who have filed lawsuit against Petrobras to recoup the losses related to the corruption charges. However, it also declined Petrobras’ plea to impose stringent standards for investors to claim themselves as victims of fraud.

A federal district court judge Nicholas Garaufis wrote for the U.S. Court of Appeals –"On remand, the district court might properly certify one or more classes that capture some or all of the securities holders who fall within the classes as currently defined."

Zacks Rank & Key Picks

Petrobras is an integrated company that is involved in exploration, production, refining, retailing and transportation of petroleum and its byproducts, both domestically and internationally. The Brazilian multinational corporation is headquartered in Rio de Janeiro. The company delivered average positive earnings surprise of 18.51% in the last four quarters. Petrobras, under the Zacks categorized Oil & Gas Emerging Markets integrated industry, sports a Zacks Rank #1 (Strong Buy).

Petroleo Brasileiro S.A.- Petrobras Price

A few other top-ranked stocks in the energy space are Cheniere Energy, Inc. (LNG Quick QuoteLNG - Free Report) , Delek US Holdings (DK Quick QuoteDK - Free Report) and Antero Resources Corporation (AR Quick QuoteAR - Free Report) .All three stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cheniere Energy delivered a positive earnings surprise of 14% in the trailing four quarters.

Delek US Holdings posted a average positive earnings surprise of 60.68% in the trailing four quarters.

Antero Resources delivered a positive earnings surprise in each of the last four quarters, the average being 665.77%.

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