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Tuesday, 11/17/2009 1:04:14 PM

Tuesday, November 17, 2009 1:04:14 PM

Post# of 44
found this on the yahoo boards

1. Shares are trading for below recent secondary price of $1.25. Buying after a cap raise/dilution has been great for investors who had patience to wait. For examples:

KOG did a secondary in May for about 10 million shares at 75 cents! Now KOG trades for about $2.5!

BEXP did a secondary in May for about 32 million shares at $2.75. Now, BEXP trades for about $10.50!

PETD did a secondary in August for about 609,000 shares at about $13. Now, PETD trades for about $19!

CMZ just had a secondary a few weeks go at $1.25. Where will it be in 3 to 4 months?? Probably higher.

In these cases, it took about 3 to 4 months for the share price to raise to the extraordinary gains shown above. If CMZ follows a similar pattern that would imply that around December/January there could be gains.


2. Insider buying: 250,000 shares recently bought by insiders!! Two insiders recently purchased 150,000 shares total at about $1.17 per share. Another insider trade for a total of 100,000 shares was reported purchased by the CFO at a price of about $1.22 and he also bought 200,000 warrants which will only be valuable if CMZ is trading over $1.55 See this at:

http://canadianinsider.com/coReport/allT...

3. Recent capital raise and sale of royalties for about $50 million greatly improves balance sheet strength. They may also have another deal in December for about $50 million to sell another royalty contract.

4. Nat gas prices appear to have hit bottom. I believe prices will revert to the mean sooner or later and with a much improved balance sheet, CMZ can benefit heavily when prices rebound.

5. CMZ has a new management team and from what I have read and see them do so far, I am impressed. They are making agressive move to strengthen balance sheet and they are investing their own money buying lots of CMZ shares.

6. From what I read at www.comptonpetroleum.com about 60% of their nat gas is hedged to protect against price drops.

7. The recent sale of about 2.5% of revenue for about $50 million. If 1/40th of this company's revenue is worth $50 million, this seems to imply a value even at very depressed nat gas valuations a value of $2 billion. If you look at current enterprise value, it is much lower than $2 billion. To grow into this $2 billion valuation stock price would have to increase substantially since debt portion of enterprise value would remain stable. I know this is not a perfect analysis in that it doesn't take in all variables but it also doesn't take into account that valuations could be much higher if nat gas prices rise to historical norms.

8. This stock once was about $17 per share before the credit crisis and recession hit the economy. While I don't expect a quick rebound in natural gas prices, I still think looking back at this time and opportunity to buy CMZ at about $1.00 per share will look very good a couple months from now and possibly truly fantastic in a couple of years or so. Also book value is much higher than current share price.

9. Given a choice between risk of letting $1 sit in a 1% cd or money and pay taxes on those minimal returns while the dollar continues to decline in value versus paying about $1 for a share of CMZ at close to historically low nat gas and stock prices, I will put some of my money on CMZ.

10. The mergers and acquisitions market has heated up in the last couple of months due to more financing options arising.

11. CMZ reported better than expected earnings, while analysts were looking for a loss of about 12 cents they made a profit of about 10 cents for the quarter!

12. CMZ is the type of small cap, low priced, beaten down stock that typically posts large gains in any "January effect" and year end market rally.