Camber Energy, Inc. (CEI - Get Rating) in Houston, Tex., is a growth-oriented diversified oil and gas company that provides custom energy and power solutions to clients across North America. The company caters to both commercial and industrial clients.

Shares of CEI have plunged 53.7% in price over the past year, and 23.8% year-to-date, due to concerns surrounding the potential delisting of the stock from the NYSE. 

However, the penny stock has rebounded over the past month, as oil prices hit seven-year highs amid the escalating Russia-Ukraine conflict. CEI’s shares have gained 11.7% in price over the past month to close yesterday’s trading session at $0.65.

Here’s what could shape CEI’s performance in the near term:

Non-Compliance with NYSE Listing Rules

Under Section 1007 of the NYSE American Company Guide, companies are required to file quarterly earnings reports with the SEC. CEI failed to file four financial reports last year–Form 10-K for the 9-month transition period ended Dec. 31, 2020; Form 10-Q for the period ended March 31, 2021; Form 10-Q for the period ended June 30, 2021; and Form 10-Q for the period ended Sept.30, 2021.

CEI had previously aimed to file the missing reports on or before Feb. 15, 2022, but failed to do so. The company has been granted an extension to file the delayed reports by April 1, 2022. However, according to a company press release, there are no guarantees that the company will do so. Under the NYSE listing rules, CEI could be granted a maximum extension until May 20, 2022, following which the stock would be delisted.

Lawsuits

Several law firms have filed class-action lawsuits against CEI to recover losses incurred by shareholders for CEI’s alleged violations of the federal securities laws under the Securities Exchange Act of 1934. The complaints allege that CEI made false and/or misleading statements and/or failed to disclose that the company overstated the financial and business prospects after its merger with Viking Energy Group.

Also, CEI allegedly downplayed the fact that its acquisition of a controlling interest in Viking would harm its financials and adversely impact its listing obligations with the NYSE. In addition, CEI allegedly failed to disclose that a prominent institutional investor was selling CEI shares at a significant rate following its shareholder update on July 12, 2021.

POWR Ratings Reflect Bleak Prospects

CEI has an overall F rating, which equates to a Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

CEI has an F grade for Value, Stability, and Quality. The stock’s 20.85 trailing-12-month Price/Sales multiple is significantly higher than the 1.74 industry average, and in sync with its Value grade. In addition, CEI’s negative 2.52 beta justifies its Stability grade. Furthermore, the company’s negative ROE is consistent with its Quality grade.

Among the 80 stocks in the Energy – Oil & Gas industry, CEI is ranked last.

Beyond what I’ve stated above, view CEI ratings for Growth, Momentum, and Sentiment here.

Bottom Line

CEI has failed to file financial reports for 2021. Moreover, several lawsuits have been filed against the company alleging multiple violations of the federal securities laws. Given its lack of transparency and concerns regarding potential delisting, we think CEI is best avoided now.

How Does Camber Energy, Inc. (CEI) Stack Up Against its Peers?

While CEI has an F rating in our proprietary rating system, one might want to consider looking at its industry peers, VAALCO Energy, Inc. (EGY - Get Rating), California Resources Corporation (CRC - Get Rating), and Baytex Energy Corp. (BTEGF - Get Rating), which have an A (Strong Buy) rating.

CEI shares were trading at $0.62 per share on Thursday morning, down $0.03 (-4.63%). Year-to-date, CEI has declined -27.06%, versus a -7.55% rise in the benchmark S&P 500 index during the same period.

About the Author: Aditi Ganguly

Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities. More...

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