Value Microcaps Junior Energy

[Ed Ajootian]

Ridgeline (RLE.V) -- I've never been more bullish on this stock than I am right here right now. I know it seems kinda silly given where the stock price is but as we all know there are plenty of times when the prices of these penny stocks don't accurately reflect the underlying company's value. In retrospect the stock got way overvalued back in March, but now it has overcorrected to the downside IMO.

3 weeks ago they said they had the 2nd water treatment unit at Santa Fe Springs "ready to commence treatment", so I'm expecting to see news of that one coming on line any day now. Also, from a transactional standpoint, I would think they might even be in a position to close on the property acquisition there by this point. Getting that other small acquisition (Piedmont) out of the way so fast has cleared the decks to allow them to work on this other bigger and more important one. The key to getting this property acquisition done is that it sets them up for some sort of debt-flavored financing, if not straight debt in the form of project finance then maybe convertible debt.


One of the better recent analyst reports that has come out on this company is the Haywood Securities report that came out on 10/2, upload it here, Ridgeline Energy Services (RLE.V) -- Haywood Initiation 10-2-12 ***. They have rated the stock "Sector Outperform" with a PT of $1, just about a double from the current quote. They're calling for $53M in revenues in Ridgeline's next fiscal year (i.e. FY ending 3/14, and with projected EPS of $.03 that puts the stock at a mere 17x next year's earnings, a ridiculously low multiple for a company with such a great growth profile.


With the stock just a hair off its 52-week low I would not blame you a bit if you held off buying it at this point. But you may want to put it on your radar screen and keep on the lookout for an ops update, and have some dry powder ready if they have some good news. There are a huge amount of people that are looking at this stock right now, and if good news comes out it would not take long for the stock to come roaring right back up to prior levels IMO.

*** For hyperlink that works go to same post on SIBBR, http://www.siliconinvestor.com/readmsg.aspx?msgid=28480638