Tiny market cap & big short interest could see PEII bounce well
Published: Wed, 08/06/14
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Hello fellow investors / traders,
So we've delivered two solid winners this week.
First IBIO continued to make gains on Monday from our Friday alert. Then DIRV was a very nice slow and steady winner today for 30%.
Let's make it three in a row with Petron Energy II, Inc (PEII).
PEII closed today at $0.0041 down 32%, a great pullback opportunity when you consider...
PEII has one of the lowest market cap's I've seen in some time. With a market cap of just $200k, it might be considered extremely cheap compared to its peers.
Everyone knows the market cap size is one of my
favorite signals to look at when determining how high and fast a pick
could rise, and a market cap this tiny is very rarely seen.
In addition, PEII is a relatively liquid stock which means traders have the ability to enter and exits trades relatively easily.
As you can see in the chart below, PEII has been decimated over the past few months but aggressive selling and shorters.
We think it might be time for major bounce here in PEII - and as you can see in May and July, these bounces have rewarded traders very well.
 Here is some information about Petron Energy II, Inc (PEII)...
Petron Energy II, is engaged primarily in the
acquisition, development, production, exploration for and the sale of oil, gas
and gas liquids in the United States. As of December 31, 2012 the Company is
operating in the states of Texas and Oklahoma. The Company sells its oil and
gas products primarily to a domestic pipeline and to another oil company.
PEII Subsidiaries
Petron Energy II Pipeline, Inc. is engaged
primarily in the transmission of gas and gas liquids for its own wells and
third party wells in the United States. As of December 31, 2012 the Company is
operating in the state of Oklahoma. In addition, the Company owns two gas
gathering systems located in Tulsa, Wagoner, Rogers and Mayes counties of
Oklahoma, one of which is fully operational. The pipeline consists of
approximately 132 miles of steel and poly pipe, a gas processing plant and
other ancillary equipment.
Petron Energy II Well Service, Inc. is engaged
primarily in Well Service operation for its own wells currently and expects to
begin well service operations for third party operators in the future. As
of December 31, 2012 the Company is operating in the states of Oklahoma and
Texas. The Company owns all of its equipment used in the Petron Energy II
Well Service, Inc.
Texas Properties
The company recently agreed to acquire
approximately 2800 acres in Munday (Knox County) Texas, this property is
comprised of 48 wells. The property has 34 of 48 existing wells capable of
producing commercial quantities of oil. They are reviewing the property
for further producing zones which may be available.
Oklahoma Properties
Petron purchased a 75% stake in approximately 1100
acres with 59 wells in Wagoner and Tulsa Counties, Oklahoma. They have 56
existing wells and 3 newly drilled wells. This acreage has 5 to 7 payzones,
which are capable of producing oil, gas and or both commodities.
The company has purchased 75% equity stake in a 105
mile pipeline gas system, Petron Energy II Pipeline, Inc. The pipeline system
extends from Wagoner County into Tulsa County Oklahoma. This system is critical
to their development in the area because it provides them access to deliver
their gas to market at minimal cost. They believe their ownership of the gas
pipeline system will provide them opportunities to grow their acreage as they
are the only transporter of natural gas in the area.
PEII has also purchased a 75% stake in a second gas pipeline system,
Petron Energy II TNT, Inc. This pipeline system extends 30 miles through
Wagoner, Mayes, Rogers and Tulsa Counties Oklahoma. There were over 450+ wells
drilled and tested in anticipation of the completion of this gas system. This
system provides access to a natural gas market for them along with development
opportunities for the company. Petron Energy II TNT pipeline is the only
gathering system to transport natural gas the area.
To learn more about PEII, visit
their website at http://petronenergyii.com/
These kind of bounce plays can be very rewarding, but as always, managing your risk is key.
Treat this as a short term trade. We feel confident PEII could deliver us some gains, but make absolutely sure you have mental or hard stops in place in case the trade doesn't work.
See you at the bell tomorrow. Disclaimer Never invest in any stock featured on our
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