- Camber Energy (CEI) is a questionable carbon capture play.
- CEI stock is a battleground stock that’s being won by shorts.
- Being positive on CEI for an unproven business pivot doesn’t justify a buy in today’s market.
They say there’s a right time and right place for everything. And if we’re to trust that advice, today is definitely not a moment when buying Camber Energy’s (NYSEAMERICAN:CEI) stock makes any sense whatsoever.
CEI is up 23% over the past year. Six months ago, many investors would probably have responded to that performance with a “big deal” retort in a less-than-impressed way. The stock market of course was at record-breaking highs, sporting double-digit gains of its own and top growth plays were routinely offering triple-digit returns.
Those halcyon-like days, however, are long gone in 2022. Right this minute, and for the past four-plus months, investors have been tangling with corrections in the stock market and more epic bear cycles in some of the biggest and proven market leaders such as Shopify (NYSE:SHOP), Block Inc (NYSE:SQ) and many others.
Yet amid even this year’s treacherous conditions CEI stock is off a scant 12%. So that means CEI is a safe haven play that’s coming into its own and a buy, right? Not by a longshot. Today let’s look at why you shouldn’t buy Camber Energy stock.
|CEI||Camber Energy||79 cents|
CEI Stock Remains a Poor Investment
Some might suggest CEI deserves to be in today’s market conversation for bullish reasons. After all, Camber Energy operates in the geopolitically volatile oil and natural gas industry as a homegrown player. But based on more real world evidence, the only thing operating in Camber Energy are Reddit’s ape population pulling strings in CEI stock to make something out of nothing.
Despite crude oil going up more than five-fold in price over the past two years and just off decade-plus highs, and owning proven reserves (so we’re told) north of 130 million barrels of oil, Camber isn’t not doing much selling in a hot market.
Sales over the past year of less than $275,000 appear to back that up. If not now, when? There’s no indication things are going to get any better for CEI.
The outfit is spilling red ink, has no cash to speak of and sports a relatively silly capitalization of nearly $300 million and price-to-book value of 68 times. It’s certainly no Chevron (NYSE:CVX) and more likely, just a stock with fleas. And sadly, even those financials can’t be trusted.
Apes Have a Flea-Ridden CEI Stock
Speaking of infestations and one spot where there has been tons of selling or rather promoting, look no further than Reddit’s biggest apes pitching CEI stock as a seductive, green energy play. That’s right. Oil and gas is Camber’s legacy business.
Looking forward, CEI stock buyers don’t need to worry about past business failures at Camber or financials that may not add up. It’s time to put faith in a brighter future as the outfit has been busy buying businesses and assets to pivot into greening the planet with carbon capture and renewable diesel.
And while I’m sure there’s some truth in that advertising, why should investors trust those ventures can successfully get off the ground with an unproven and financially questionable small cap? Remember, CEI’s pivot into carbon capture, if it were to get underway, would be up against energy giants such as Royal Dutch Shell (NYSE:SHEL) and Chevron (NYSE:CVX). It’s at a decided disadvantage.
As such, I’d suggest running rather than walking away from CEI stock. Alternatively, investors could take their cue from any one of CEI’s bearish short interest of 52% and where delayed financial filings, dilution and other problems have provided, as Kerrisdale Capital says, “the most fun actionable short since $GSAT in 2014.”
Bottom Line on CEI Stock
It should be painfully obvious I’m not a fan of CEI stock. Am I being overly critical? Maybe. But in today’s market where investors can pick up proven blue-chips for sometimes a fraction of what they cost last fall, Camber Energy doesn’t deserve to be defended at any price.
Oh, and don’t forget that shares of CEI stock are currently facing delisting from the NYSE American Exchange due to multiple failures to file documents with securities regulators. Sure, CEI can move to the over-the-counter market, but it’s just one more unsightly blemish warning investors to reconsider a purchase of Camber Energy.
At the end of the day, maybe carbon capture becomes a reality for CEI. Right now though, this meme stock has already gone up in smoke, burned the majority of its shareholders and there’s nothing to suggest a CEI stock purchase is going to prove differently for tomorrow’s investors.
On the date of publication, Chris Tyler 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.