CWEI closed @ 15 5/8, -7/8, Bid 15 3/8 X Ask 15 3/4....Vol..100.4K
Another ugly day for CWEI. Oil was down sharply today but that fact alone does not account for the actions of the stock. CWEI is selling at just barely over 8X 1996 expected earnings and just over 12X 1997 expected earnings ($1.26, average of Hanifen and Paine Webber). In an Email to Lajuanda Holder CWEI, I noted the following:>>> I think the biggest reason for the continuing drop in share price is the double whammy created by the Paine Webber/Zacks mistake--it hit twice--first when this year's estimate went from $1.70 to $1.30 (part of the mistake) and then a week and a half later where 1997's estimate was allegedly cut from $1.74 to $1.25 (part of the correction). The first one started a psychological reaction, and then the second one gave investors the impression that CWEI wasn't going to do well in 1997--I don't think it mattered that the 1997 estimate wasn't ever $1.74 to begin with (most investors didn't know that)--what mattered was the psychological impression it gave them--and once the stock price started sliding--it confirmed in their mind that something was wrong---thus, they have created, and are continuing to create, their own self-fulfilling prophecy--it is still continuing.<<< You get that, coupled with some negative posts, and here we are with a severely underpriced stock. Lajuanda did add a positive note; she was told by an interested investor that CWEI was mentioned as an undervalued stock in the Wall Street Digest--if anybody knows of the article--please post it here. She also mentioned she is getting more calls from interested parties, evenly divided between brokers and individual investors. Although the seismic survey hasn't yet started, she said it should start "any day now."
Good to hear from you Miller, I was wondering what happened to you. Clayton Williams believes they are on trend with the Cotton Valley formation and I don't think it will be that long before we find out for sure. Going to be very interested in feedback from you on the well you are drilling with CWEI.
March Oil $23.10, down 0.81 (CWEI received $18.78 in Q1 1996)
Natural Gas 2.50, down 0.07 (CWEI received $2.29 in Q1 1996) |
