As for answering the second part of your question re: adding to your position, here goes:
The stock has been as high as $2.65 in the last nine months and as low as $.16. Prior to that(the "old" CSMA had been hyped up to $8 and up).
Now, after the high of $2.65 in November 1997, the stock drifted down to $1.01 at the end of the year. This occurred in the climate of: increased Ad Hatters sales, development of legislation to authorize a Class V well and penalize those who won't use the Class V well; acquisition of LPS assets and the potential for rolling out financial management programs and loans to a broad customer base.
Since the first of the year, with the stock already down nearly 62% from its November high, the price has fallen nearly 70% from the $1.01 January 1 level, closing at $.31. This price decline occurred in spite of the fact that the aforementioned legislation breezed through the Utah legislature, the Class V well was conditionally approved for nearly double the original 7500 bbl/day request(14,400) and the first contract for dumping has been obtained, the Company acquired a Class II well in Texas that can similarly be modified to Class V, the LPS pilot program in Pennsylvania has expanded to other states and the Company has taken steps to rid itself of problems with its shell through the proposed merger with Buf Cap IV.
So, why the price decline of 88.3% from its high?
o We are not a reporting company yet.
o We are not officially aware of Class V processing yet.
o No revenue stream has been reported from LPS
o The problem with the shell was not known to shareholders last fall
o The outstanding share count of 25mm is nearly double what it was last fall(due to LPS-7.5mm, oil/gas ops-??mm, warrants exercised-??mm, misc??mm)
oOil/gas ops have been disappointing to date...but then I never valued them in the first place.
That is pretty much it. So the question you should ask yourself is whether the resolution of the above bullets must all occur BEFORE you buy anew.
IMHO, the events that have transpired still exceed those that still must occur, so it is an initial buy rec at a minimum, but I would be prepared to average down as well.
TG |
