Crude oil is in a major bull market right now. The price has rebounded from historic lows in 2020 to the highest levels in a decade. Traders are rushing to buy names in the energy sector like Camber Energy (NYSEAMERICAN:CEI). Unfortunately, not all companies are equally well-equipped to profit from current market conditions, and CEI stock will be left behind even as the industry rises.
A variety of potential setbacks, such as China’s latest Covid-19 lockdowns, the strategic oil reserve release and Federal Reserve’s interest rate hikes have failed to stop oil’s ascent. Adding fuel to the fire, the price of natural gas has skyrocketed in recent weeks as well. It’s a perfect storm for energy producers, but CEI stock has continued to languish.
Camber Energy has a long and winding corporate history. It used to be known as Lucas Energy, and when that firm ran into trouble, it reorganized and became Camber. Camber, in turn, did deals with Viking Energy, which operated oil properties in Texas, Louisiana, and other nearby states. This didn’t generate much success either, however.
The company’s overall revenue fell from an already-low $2.7 million in 2019 to just $397,000 in 2020. Anyone buying Camber because it is in the energy industry should reconsider that thesis; it doesn’t matter how high oil and gas prices go when a company has so little production from its properties.
Our Chris Tyler recently highlighted how Camber Energy is now trying to change up the story. Instead of focusing on the company’s underwhelming oil and gas operations, now there’s a new and seductive story around carbon capture and green energy.
These are indeed valuable and promising technologies. However, there is little reason to believe that tiny Camber Energy is the company best equipped to realize the potential of these technologies. Rather, its long and unsuccessful history as a publicly-traded company should give investors pause.
The company has failed to achieve profitability — or even meaningful revenue — from a variety of past efforts. A desperate pivot to green energy is unlikely to change its long-term outlook very much.
Sure, CEI stock could pop in the near-term. It’s a battleground stock with heavy short interest. In the long run, however, it seems unlikely Camber will be able to accomplish much to back up its current $275 million market capitalization.
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On the date of publication, Ian Bezek did not have (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.