JMG,
Another point that I wanted to make regarding what is holding CWEI back is the political climate CWEI is in. CWEI, as I am sure you know, first went public in November, 1993. The brokerage that took them public at a price of $17/share was Paine Webber, and I believe Morgan Keegan played a part in that IPO. CWEI fell upon hard times soon thereafter and within two years the stock was down to $2 a share. I am sure that both Paine Webber and Morgan Keegan had strong Buy ratings on CWEI during that offering. There had to be a lot of injured client investors during those times and I am sure it did not sit well with either brokerage. Only recently has Paine Webber began following CWEI more closely. Morgan Keegan, as evidenced by their failure to perform analysis, and just putting out estimates that have no basis in fact, is hurting CWEI. Now with Paul Ferretti leaving Rodman, Renshaw and going to ABN AMRO and coming out with a "politically motivated" Hold rating, CWEI's stock price was again damaged.
Morgan Keegan has previously indicated they will provide closer coverage and possibly do a write-up on CWEI as the Cotton Valley play takes shape, and I am sure if they do that they will change their rating at that time. ABN AMRO needs to get some of their investors on board, along with CWEI performing, for their rating to change. Rodman, Renshaw will have a Strong Buy rating as soon as they can get an Energy analyst on board and up-to-speed. Paine Webber; I would think if anything positive begins happening with the 3-D seismic survey, with probable eventual drilling, they would also change their rating.
CWEI's stock price should go up, even without a pinnacle reef well, just on earnings. If the pinnacle reef wells turn into reality, then we will see CWEI as one of the stocks whose PE is well over the average of the other companies in this industry. If either the Savell well, or the Rachui, obtains meaningful production, then I think we will see more interest, and speculation reflected in CWEI's stock price, with, or without, preferably with, the blessing of the analysts following CWEI. Let's hope this all comes to pass and we are on-board at that time.
Buzz |
