US Energy, the Rodney Dangerfield of the alternative fuels microcap world, made a valiant effort to break out today on a strong quarterly earnings report.
As I write this BLOG at 10:30 Pacific, the stock has already traded 1.1 million shares and tried to break out. It surged to $.14, but unfortunately as has been the consistent pattern with this stock, sellers appeared to sabotage the price movement of the volume surge.
The company reported top line growth of 217% above Q3 of ’05- they approached the $.5 million mark in revenues, and they made a gross profit of $200k, which suggests some pretty good margins.
Here’s the chart and some thoughts:
You can see the stock made a nice move up today on big volume, but has since turned around and is near the low of the day. This is a pattern which continues to repeat itself with this stock.
In the press release, USEI states there is an in depth discussion of the progress in each of their major projects in their 10Q- I can’t comment because the 10Q has not been filed as of yet. As soon as it is, read it over and share some thoughts.
USEI is now in a position of effect a reverse split if they so choose. I believe it is highly likely the company will engage in a reverse split, but unlike PhotoChannel, I don’t believe it will be productive for the shareholders. I believe this one will have the stock chasing to new all time lows. Too bad, because the company is going to rock in ’07.
Reverse or no, the market will still have to deal with a massive supply of stock. On the plus side, in ’07 the company will generate some real numbers, and who knows what new business might come in.
Bottom line- My $.12 SSL still stands for traders. For long term investors, corporate developments are very strong.
If the stock craters after a reverse split, it could be the oversold bargain basement deal for 2006 or early 2007. Long term, I still love it.
Comments and questions are welcome.