Now down to around 53 cents per share, Camber Energy (NYSEAMERICAN:CEI) is back to the levels it saw before it attracted heavy attention last fall. What’s behind this continued pullback for CEI stock?
There are several factors causing the drop, but they are somewhat related to each other. First, recent sentiment shifts have been bad for growth stocks. They’ve also been bad for penny stocks and clean energy stocks. For better or for worse, Camber fits into all three categories.
With this, it’s no surprise CEI stock has taken such a big dive. In total, it’s fallen 89% off its 52-week high of $4.85 per share. In most situations, a stock that performed that badly is likely to continue doing so.
However, that may not be the case with Camber Energy. The company’s transformation has only just begun. It could take time before its clean energy portfolio really takes off.
Based on the broad strokes of its game plan, CEI stock may be worth looking into. This could be a more promising “future of energy” play than its current share price suggests.
From Black Gold to Green Gold?
So, what’s the story with Camber Energy? Let’s take a brief look at the company, what it’s been up to and where it may be headed from here.
Through its majority-owned subsidiary, Viking Energy (OTCMKTS:VKIN), the company’s main business until recently has been oil and gas (O&G) exploration and production (E&P).
But over the past year, Camber Energy has started to become a clean energy company. This unique development played a major role in putting CEI stock, once one of many small cap O&G E&P stocks, on the radar of more investors.
First, through Viking, it has purchased Canada-based Simson-Maxwell Ltd. This new subsidiary builds industrial engines and power generation products. On the surface, that may not sound so green. Yet the company plans to use this business as a springboard to become a clean energy products and services provider.
Second, again through Viking, Camber is making a big move into renewable diesel. In short, the company isn’t concentrating on one particular area to accomplish its shift from black gold to green gold.
The Clean Energy Pivot May Work for CEI Stock
Yes, CEI stock is far from the only “green wave” play that has been knocked down by the stock market’s current volatility. In fact, plenty of larger, higher-profile names have also experienced big declines and may be on sale.
However, that doesn’t mean you should take a hard pass on Camber Energy without giving it some consideration first. Some, including a vocal short-seller, have poked holes in its “go green” strategy. But it’s not out of the question that these changes will lead to stronger results — and a rebound in its stock price.
There’s big opportunity in the two areas it’s targeting for clean energy investment. With the company’s move into Canada, it’s found a fast way to put the carbon capture technology licensed from ESG Clean Energy to work.
Canada has very high carbon taxes, so it’s even more important for businesses to reduce carbon emissions. Given Simon-Maxwell already provides products to a variety of Canadian industrial companies, it’s a natural fit for them to offer carbon capture solutions as well.
The company’s renewable diesel venture could also pay off. Granted, the facility it’s buying is in the U.S. rather than Canada. Nevertheless, like I hinted at above, the federal government is making clean energy a top priority.
Corporate America is also looking to adopt more environmentally-friendly practices, for reasons relating to both image and practicality. This could mean a wave of demand for renewable diesel down the road.
The Takeaway on CEI Stock
Earning a “B” rating in my Portfolio Grader, I wouldn’t write off Camber Energy right away. I wouldn’t buy it on a whim, either. As always, do your due diligence. See for yourself whether this company has the potential to become a major name in this fast-growing industry.
I’ll add that the company’s financing deal announced last month is another positive in its corner. This may signal that it’ll have the funds to make its move out of the oil patch and 100% into clean energy — and possibly into the green.
Remember to keep in mind its high-risk nature. While holding steady now, shares could sell off again. But if you’re on the prowl for clean energy plays, keep CEI stock on your watchlist.
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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.
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