Based in Texas, diversified energy and power solutions company Camber Energy (CEI) is, in the wake of a geopolitical in eastern Europe, suddenly a darling on Wall Street. Or at least, retail investors seem to have fallen in love with CEI stock lately. Before you jump on the Camber Energy bandwagon, though, you should ask yourself an important question…
Can you handle the volatility?
Holding CEI stock when it goes up 10% in a day is exciting – no doubt about that. However, there are also days when the stock goes down faster than it went up.
Nimble traders may be able to catch the big moves and profit from the share-price swings. On the other hand, cautious shareholders should consider whether Camber Energy meets the criteria of a worthy long-term investment.
A Closer Look at CEI Stock
The history of CEI stock shows that it’s capable of huge price moves. For instance, in late September of 2021, the stock catapulted from 66 cents to a 52-week high of $4.85.
This is a perfect example of how a low-priced stock can move very quickly. Yet, this is a double-edged sword as the downside risk is always present.
Shockingly, most of CEI stock’s gains from September 2021 were lost by the end of the year. Fast-forward to March of 2022, and the stock was back on an upswing, but with unpredictable daily price moves.
The Camber Energy share price was slightly above $1 as of March 10. Going forward, the $1 level will be critically important. After all, the last thing that the shareholders want is for the stock to trade in pennies rather than dollars.
Let’s not mince words. Many amateur traders are focusing on Camber Energy not because they’ve researched the company, but because there’s a wave of interest in small energy businesses.
Yahoo Finance’s Ines Ferre summed up the frenzy surrounding Camber Energy and similar energy-sector names:
“… a common theme that you will see with these companies, they’ve been trading in the single dollar digits. They’ve been exploding on social media, on StockTwits, highly mentioned. They have been some of the top 10 retail trader names on Fidelity. Very speculative.”
I agree wholeheartedly. Some retail traders want to make fast money while the oil price is going up. The problem here is that, if/when the crisis between Russia and Ukraine is resolved, the price of oil could fall sharply.
Retail investing commentator Matt Korhs made a similar point about CEI stock. As he put it, retail traders are “trying to play off the geopolitical developments.”
In light of this, Korhs offered a timely warning. “If things were to calm down … It’s one thing I preach, and I hope a lot of these people do, is [to be] actually locking in those gains,” he suggested.
Where’s the Transparency?
Even beyond the over-reliance on oil-price gains, it’s difficult to invest in CEI stock with confidence because Camber Energy hasn’t issued a quarterly financial report in a long time.
Research on a company’s financials is foundational to informed long-term investing. Yet, Camber Energy is making this type of research nearly impossible, as the company’s most recently published Form 10-Q (as far as I can tell) covers the three months ended Sept. 30, 2020.
That report revealed huge year-over-year revenue and net earnings losses. Still, that’s no excuse for concealing Camber Energy’s recent fiscal data.
The NYSE American exchange has even warned Camber Energy about the…
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