RECAF: Fundamental Analysis - In Lieu of Warrant Expiration
After this last run we are in a clear consolidation period. Investors have no reason to exit the space unless they continue to pay for warrants. (The long bet is that RECAF proves an economic hydrocarbon system). I anticipate continual sideways movement with possible downward trend until:
1. The five day moving average meets the 50 day moving average.
2. The company announces the expiration of all warrants on March 18th, 2020. This should be an indication that the selling has stopped from shareholders who have participated in early corporate financings.
3. News of completion with the first well and beginning of the second should ensue before the warrant expiration date.
Fundamentally, most investors are flocking to the space as they speculate an untapped oil basin in Namibia. I think there is security in buying dips with this stock between now and the completion of the program. Regardless of share price the stock will skyrocket if they discover oil. However until that time, I expect more investors to flock to the space as oil continues to increase in price and speculators look for leverage. The closer we move to the completion of the program the more I expect an appreciation in share price.
1. The five day moving average meets the 50 day moving average.
2. The company announces the expiration of all warrants on March 18th, 2020. This should be an indication that the selling has stopped from shareholders who have participated in early corporate financings.
3. News of completion with the first well and beginning of the second should ensue before the warrant expiration date.
Fundamentally, most investors are flocking to the space as they speculate an untapped oil basin in Namibia. I think there is security in buying dips with this stock between now and the completion of the program. Regardless of share price the stock will skyrocket if they discover oil. However until that time, I expect more investors to flock to the space as oil continues to increase in price and speculators look for leverage. The closer we move to the completion of the program the more I expect an appreciation in share price.