Value Microcaps Motherboard

[abh3vt]

Disappointing action in CHAR.ob today. Stock back down to 3.50, presumably on the idea that one of the larger shareholders (Allen Holdings) is continuing to unload their 4MM share stake in the company. They sold 347k shares in the past week at prices ranging from 3.50 - 3.93.

Stock has come under pressure because Lukoil bought a controlling interest with its acquisition of Nelson. Now, the next largest shareholder is signalling though its selling that it wants out. Of course, they could just be diversifying and locking in some long term gains. Still doesn't make sense unless they fear that the price could drop further.

The company earned 0.17 fully diluted, fully taxed in Q2. Results will probably be even better in Q3. By my count, TTM fd eps is 0.43 thru Q2, so the stock is trading at 8x trailing earnings. Unfortunately, the company has said little regarding what will happen to it once Lukoil is officially the largest shareholder, and until we have some resolution there, my guess is that the stock will remain very undervalued.

Based upon a similar reserves valuation that Lukoil paid for Nelson, the stock should be trading twice as high as it is currently.