Energy bulls looking for a low-cost way to bet on higher fuel prices in 2022 should stear clear of Houston-based Camber Energy (NYSE American:CEI). While shares of the diversified energy and power solutions company currently trade for less than 50 cents, CEI stock isn’t the right investment for energy sector profits.
Every sector of the market is down in 2022 except, of course, for energy. The Energy Select Sector SPDR Fund (NYSEARCA:XLE) is up more than 32% year to date, but CEI stock has seen its value cut in half.
Let’s take a closer look at Camber Energy and why you should avoid CEI stock.
A Closer Look at CEI Stock
CEI stock jumped from a low of 33 cents on Aug. 20 to a high of $4.85 on Sept. 29 — up 1,370%. It’s hard to know for certain, but it’s possible that Reddit traders targeted Camber Energy for a short squeeze at that time.
But the hype passed quickly, and CEI stock slid back to around the $1 level a week later. Currently, shares are trading below 50 cents, although they still sit 27% above their 52-week low.
In January, InvestorPlace contributor
Fast-forward to May, and InvestorPlace contributor William White observed that Camber Energy “released an incredibly delayed earnings report.” The company, under a potential delisting threat, finally released its quarterly report on the last possible day.
Timeliness, it seems, isn’t Camber’s strong point. So, was the long-awaited earnings report a good one, at least?
Camber’s Q1 Loss Widens Despite Higher Fuel Prices
It’s no secret that both oil and natural gas prices have soared so far in 2022 . This isn’t exclusively a second-quarter phenomenon, either. In the first quarter, the price of a barrel of West Texas Intermediate crude oil jumped 33%, while the price of natural gas rose by more than 50%.
This should have helped buoy Camber Energy’s Q1 financial results. But the company incurred a net loss of $68.2 million, significantly worse than the Q1 2021 net loss of around $44.8 million.
Camber posted a mere $136,407 in revenue from oil and gas sales. At least it marked an improvement over the $65,653 in revenue from the year-earlier quarter. Perhaps rising fossil fuel costs contributed to this improvement.
But the balance sheet shows assets totaled $48.3 million, as of March 31, and the company’s liabilities totaled $116.5 million. Also, the company reported a total stockholders’ deficit of around $68.2 million.
The Bottom Line on CEI Stock
It’s worrisome that Camber Energy managed to dig itself into a deep financial hole despite rising fossil fuel prices. Makes you wonder how the company would perform in a downbeat energy market. Plus, it’s not a good sign that Camber Energy took so long to report its quarterly results.
All in all, it’s wise for investors to avoid CEI stock. Pick a different name if you’re seeking reliable returns from the oil and gas industry.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.