Judging by the short interest increase as of late, something could happen that shorts are betting on. If I had to guess, shorts are figuring either insiders will sell their lockup shares on Jan 25, and crush the price. However if the shorts crush the price first, it's doubtful that scenerio will play out.
My strategy is to be somewhat light here, but buy more on each dollar below $20. Therefore buying more at $19, $18, $17, $16, and all the way down to $10 should the shorts take it there.
Bottom line is, if something were really wrong, other service companies to the fracking industry would be getting crushed. However it seems CJES is being hit much harder, and therefore a short play is at hand. Is there something wrong with the company that only the shorts know about- who knows.
Therefore it's a risk reward play. With CJES estimates for $4.25+ fully taxed for 2012, the stock would be at $40-$60 if no fracking concerns were at hand. Is it worth buying at $20 for a chance for a double or triple ? Of course what if the worst case scenerio happens, and fracking is banned. Then I assume $10 or less would happen real fast. In my view, the real risk reward here at $20, is either you lose 50% if things get horrible, or you make 100%-200% from here.
Absolutely wrong. I bought at $20 six weeks ago or so, and haven't sold a share of that. When I said be light, I simply meant don't invest all your dollars here in the $20s when it appears the stock is under a short attack. I will therefore wait to add to get to my full position at each dollar below $20.
You are also way off on your PE. Going forward, fully taxed and diluted EPS is estimated at $4.25+. With the stockprice at $20, the PE is in the 4s going forward.