Gediminas Jasionis
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CIC Energy Corp. (TSE:ELC) (PINK:CIEGF) Sees Promising Recovery in Price

by Gediminas Jasionis Oct 6, 2011
elc_chart.pngCIC Energy Corp. (TSE:ELC) (PINK:CIEGF) added significantly to the share price as traders noticed the oversold stock.

ELC added 15.2% on Wednesday as traders paid attention to the oversold position the stock is in. The stock continued to generates significantly high trading volumes for the past three sessions, reaching 1.49 million on Wednesday, which was far above the 90-day average of 172 thousand.

The stock started moving up after a short consolidation which worked to test the support at $1.4 per share. The price appreciation finally defied the downtrend that's been dominating throughout September.

The company holds a market cap of $91.8 million, while their book value is $182 million, meaning the market value is roughly only half of the net asset worth of the business. This gives a significant reason why the stock price shouldn't continue to go down.

cic_energy_logo.jpgAs for why the price went so far down in the first place is mainly because of large net losses. The most recent quarterly report depicted $9.1 million in net loss, although $8.1 million of it is attributable to impairment against the value of exploration properties and are not cash losses. While that is somewhat consoling, the decrease in the value of the properties is bad for the general image of this startup exploration business.

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