Camber Energy Inc (NYSEAMERICAN: CEI) is having an overwhelmingly strong start to the trading session, trading on gains of more than 14% as it bounces off of lows. Nonetheless, this may be the start of strong movement ahead for CEI. Here’s what’s happening:
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CEI Stock Profit Taking May Be Over
Recently, we’ve seen quite a bit of profit taking in Camber Energy stock. After the company announced plans to regain compliance with NYSE listing requirements, and the closing of the Lineal Star acquisition, the stock saw tremendous gains.
However, as is the case often in the penny stock world, the strong gains in the stock were quickly met with profit taking, bringing the value down. Nonetheless, the profit taking may be over and gates to strong gains ahead may be opening for CEI and its investors.
Why The Stock Could See Strong Gains Ahead
At the end of the day, recent news out of Camber Energy has proven to be positive. First and foremost, the company has remedied its listing deficiency by moving forward with a 1-for-25 reverse stock split. As such, CEI will maintain its listing on the NYSE American.
Moreover, the acquisition of Lineal Star proved to be powerful news. Keep in mind, Lineal Star Holdings has been in operations for more than 6 decades, offering pipeline supplies and services to oil and gas companies.
This is a highly accretive acquisition that will offer up two key points of value for investors:
- First and foremost, as a company that has been in operation for more than 64 years, Lineal Star Holdings has a solid foundation and strong history. Moreover, the company has a track record of producing revenue, making this a highly accretive acquisition for CEI as this revenue will now come in house.
- Moreover, CEI is an oil and gas company. The company focuses on non-traditional methods of production, but still requires the pipeline products and services offered up by Lineal Star. As a result of the acquisition and the company’s ownership of Lineal Star, it will no longer have to pay a profit margin on these products and services, ultimately driving operational costs down.
The Bottom Line
The bottom line here is a simple one. Camber Energy seems to be making the right moves and should start heading in the right direction. With the listing deficiency now behind the company and an accretive acquisition that will likely drive costs down while significantly boosting revenue, CEI is a stock that’s well worth watching.
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