KUB.V has its highest close in over 2 years

I first wrote about Cub Energy (KUB.V or TPNEF) back on October 31st 2016 when the price was sitting at a whopping 2 cents.

An intriguing penny play - KUB.V - Ukranian Oil and Gas

I had established a position in KUB.V at 2.5 cents (I almost never get the bottom) so I'm obviously very happy.  If I were to sell for the current closing price of 7.5 cents that would represent a tripling of my investment which isn't bad for just over three months.  

I know I post continually how nobody ever goes broke by taking profits, however I'm planning on holding because I genuinely believe there is potential for significantly higher prices in the weeks and months to come.  If you've followed my posts on RMHB here you'll see that I wasn't shy about taking a 50% profit on that play, but I believe KUB.V is different.  (RMHB LINK - check the comments)

Here is a 3 month chart that shows how KUB.V has performed since I first wrote about it back at the end of October:

Taking that chart in isolation, selling now might seem like a wise course of action.  But taking a longer view I see potential for substantially higher prices.  Of course please take note that as a current shareholder, my thoughts and opinions are also INCREDIBLY skewed....there is something called "confirmation bias" and I can be as prone to it as anyone.  

One quick note on the 3 month chart and taking note of stochastics (the indicator at the very top), they show KUB being in an overbought position, so a near term pullback would not shock me.

Its when looking at the 4 year chart, that's where I see the potential for much higher prices....at least in the area of 20 to 25 cents....roughly three times where they are now and about 10 times higher from where I initiated my position.

You have to go back to 2013 and early 2014 to find KUB trading up around that 20 to 25 cent area. So what makes me think it can get back there?

Often with penny stocks you will see the PPS fall in tandem with massive dilution, I've seen penny stocks with 1+ billion shares issued.  KUB.V on the other hand had 311.7 million shares issued at the end of 2013, and now about four years later there are 312 million shares listed as issued as per stockwatch.  

You can verify those numbers by checking the company's filings on SEDAR and I encourage anyone considering an investment in KUB to do so.  

So obviously the drop in value from 20+ cents to about 2 pennies isn't attributable to the company printing shares and dumping them into the market.  What was it?  Those who don't keep up on world politics might have missed the situation which cropped up in 2014 between Russia and Ukraine over a little parcel of land called the Crimean Peninsula.  

Here's a Wikipedia article on it:  Russian military intervention in Ukraine (2014 - present)

Looking at the above 4 year chart its hard not to draw a cause and effect relationship between this conflict and KUB.V 's plummeting share price.

Of course all that is in the past, and KUB has already climbed well off those 2 cent lows.  So why do I think it can keep climbing back to the valuation it had before the Russian intervention.

Back in November the company released its third quarter financial and operational results, Included in those numbers was the fact that the company's working capital and cash position were the best they had been in over two years.  Also noted was the reduction in royalty rates for natural gas in Ukraine from 55% to 29%. 

Here's a link to the PR or check the filings on SEDAR:  

http://finance.yahoo.com/news/cub-energy-inc-announces-q3-210507800.html

Frequent readers of this miserable and pathetic little blog know that I like to keep an eye out for what I consider to be the unholy trinity of the market game.  In order those three things are Promotion, News and Hype.  With Cub Energy I have found zero promotion going on, if anyone knows of any please leave a comment because I have come up completely dry.

In terms of News there isn't much either.  Aside from the required quarterly and annual results or other material information news is pretty scant.  Cub Energy doesn't look like one of those companies that goes to investor roadshows, issuing PRs every other day about any little tidbit they think might drive interest to the stock.   

Their most recent PR was on Dec. 28th of 2016 announcing a 20 year production license and increased acreage: 

http://finance.yahoo.com/news/cub-energy-inc-announces-20-141500227.html

Back when I first wrote about KUB in October of last year I offered up the opinion that my take on the chart was that it showed signs of accumulation.  The reason I thought, and the reason I still think, KUB was undergoing accumulation is because I believe I'm not the only one who sees the PPS returning to the levels it was at back in 2013, and possibly even higher.

Please note, while I am very bullish there are still risks.  The political situation could deteriorate again, if it does I would expect KUB.V to drop in value.  Penny stocks are incredibly risky and not suitable for everyone.  I would never suggest investing a single dime in KUB or any other penny stock unless you can afford to lose some, and possibly even all of your investment.  

Comments are always welcomed, but they are moderated and will not be published if they contain profanity.  And no spam allowed either, if you want to promote your pills to increase the size of the male organ, then do it somewhere else.  At my age and with three kids that's not a concern, you'd have to go back to the 1970s to get me interested in anything like penis enlargement.