Over the last week, the stock of Compton Petroleum Corporation (TSE:CMT), (PINK:CMZPF) has not changed at all in value, though the trading volumes are rising. Maybe, this is not so much unexpected, having in mind that recently no fresh news has been announced that could drive the price up or down.
Since last Thursday, CMT has constantly closed the day at $0.44 per share and since the beginning of this month, it is gradually gaining volume too. The rising turnover probably predicts that a significant change in the price is just forthcoming. It is still not clear if and when it will occur, and in what direction the alteration will be.
Is this a calm before the storm, or the stock will retain its tranquil float on the market? The current shares’ composure comes after a period of depreciation that began on New Year. It led CMT to a three-month low at $0.390 in mid-January, which might serve as a support level in the future. The graphics suggests that CMT could meet resistance at $0.470.
In the absence of relevant official information, people are unsurprisingly bewildered how the stock will behave in the future. The present market cap of Compton is $116M and the net worth of the business is about $954M. This indicates that the company is probably undervalued and there is plenty of room for future appreciation of the shares. It does not mean, however, that the price will inevitably go up.
The latest financial reports, filed on SEDAR and related to the third quarter of 2010, reveals somewhat contradictory trends, such as:
- At the end of September 2010, Compton had a positive working capital of $53M, while one year before that there was a capital deficiency of $322M;
- There is a net loss of $4.34M for the third quarter of 2010, compared to a net income of almost $13M for the corresponding period of 2009;
- Total debt is 40% down, and revenues have slipped by 6% in comparison with the relevant three-month period of 2009;
- The company had a solid financial position with almost $69M in cash as at Sep. 30, 2010.
These dubious results make it no easier to foresee how the stock will perform in the future.
