A little over a month ago, Camber Energy (NYSE:CEI) was a name that came on the radar of many investors. Primarily, that happened due to the intense run-up in price and volume CEI stock experienced in a short span of time. From the end of August through the end of September, shares in this low-priced oil and gas stock, which is exploring opportunities in the clean energy space, rocketed from around 50 cents per share to as much as $4.85 per share.
But since then, the trend is no longer its friend. Now down to around $1.46 per share, fewer people are talking about it. That’s including the Reddit stock trading community, who possibly (it’s not for certain) played a role in its rollercoaster moves a few months back.
So, lacking the momentum it once had, should you take a hard pass on it?
Mostly, because the company’s clean energy endeavors are worth taking a closer look at. That’s still true even as one vocal short-seller hasn’t been afraid to create fear, doubt, and uncertainty about Camber in the minds of investors. Of course, you should take a look at the criticisms made by this short-seller, and see for yourself whether there’s substance to them. But again, don’t let this negative factor make you jump to a fast conclusion with Camber.
Like many low-priced stocks, it’s risky. Keep this in mind too, if, after conducting your own due diligence, you still find an opportunity here.
The Latest With CEI Stock
In recent weeks, shares in Camber have been bouncing between around $1 and $1.80 per share. This comes following the once-trending stock’s rapid price decline, seen shortly after its epic run-up mentioned above.
The likely culprit behind this change in sentiment was the scathing “short report,” mentioned above. Issued by Kerrisdale Capital, a fund that shorted CEI stock, the 25-page report makes a lot of allegations. These include allegations that so-called “pumpers” are misrepresenting the company’s involvement in the clean energy sector.
Like I mentioned when I last wrote about Camber, the company has taken the high road when it comes to the claims made by Kerrisdale. But interestingly enough, ESG Clean Energy, an indirect partner of this company, has recently come to its defense. As InvestorPlace’s William White reported Nov. 17, ESG has issued a response to Kerrisdale. Along with fighting back against Kerrisdale’s claims, the report discusses the market potential of this technology.
After getting a brief boost from this news, shares are once again moving lower.
However, don’t let the market decide for you whether this is a good opportunity. Instead, it’s wise to take a deeper look at both the information recently presented by ESG, plus what’s known about Camber’s other moves in the clean energy space.
A Not-So-Hidden Clean Energy Play
On the surface, CEI stock looks like just another small independent oil & gas (O&G) company. You get that perception from both its name, and the fact that its main asset is majority ownership of another small O&G company, Viking Energy (OTCMKTS:VKIN).
Then again, its most recent moves may suggest that it’s a possible clean energy play in the making. First, back in August, Camber announced it had bought a 60.5% stake in Simson-Maxwell Ltd, a Canada-based maker of industrial engines and power generation products.
Now, this may not sound like a “green wave” type of business. Yet, if you couple it with the carbon capture intellectual property (IP) licensing deal Camber’s Viking subsidiary made with ESG, then it all starts coming together. This deal, which gives it the right to ESG’s clean energy technology in all of Canada, is a nice compliment to Simon-Maxwell.
This is a big deal since, as ESG itself detailed in its Kerrisdale response, Canada has very high carbon taxes. At $40 per metric ton today, they’re set to soar through 2030. With this, there’s likely going to be high demand for this technology. Especially from companies like Simon-Maxwell’s power generation clients.
The Verdict on CEI Stock
Its recent short-lived pop notwithstanding, the market has changed its mind on CEI stock. Is this the correct call? That’s up to you to decide. I personally give it a “B” in my Portfolio Grader. But don’t just take Kerrisdale at its word that this is a “bad stock.”
At least, not before doing your own research. While you’re at it, take a closer look at the ESG licensing deal. Specifically, how it synergizes well with Camber’s Simon-Maxwell unit.
It’s not without its risks. But give it a full look first. Instead of deciding this is a penny stock to avoid, you may find that CEI stock is a high-potential clean energy play. One that the market right now fails to appreciate.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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