RE:BNE flirts with 52 week highs Good write up. The market for small cap energy stocks continues to be zombie land. Bonterra’s price has held up and occasionally shown some spark; what little volume there is continues to be propped up by short churning, but the pretense of liquidity has evaporated as this churning is a shadow of what it once was. My read is that many of us have used the short trade to accumulate and a few still do. These are the only real buyers; but critically only the shorts are selling. More of the stock than ever is now locked up and the short traders cannot find much to borrow. Other names are still being short-churned to the moon, fooling some to think that there is real interest in them.
But let’s be frank: the underlying reason for the lack of trading is that funds and institutions are not in the market; and will not be until they see both better numbers and evidence that Canada again has government that pays any attention to the rule of law and/or has a shred of responsible leadership.
Retail investors (at least the sensible ones; and me) have turned off the TV and retired to the back deck for the summer. We want to see the Q2 numbers and the projections based on these and the guesses on what the price of oil and state of play will be going into 2022. Likewise, while we all believe that the hype about the Wuhan flu has now clearly jumped the shark, it is very easy to rationalize waiting until September to see how this will play out. There is nothing that government cannot screw up even worse than they have already.
All things staying equal, Bonterra will plod along here but as you point out, the plot is easy to read and as the pace of its recovery accelerates the share price will mirror the numbers on income; the potential to renew the dividend; and the possibility of growth - either internally or from accretive acquisition. And, at some point, investor confidence and interest will re-emerge and with it better, more realistic share price values. Better news will only make for a quicker, better outcome.