Well the risk is just plain and simple market risk. Markets aren't perfectly efficient...meaning that stocks don't always trade at a perfect worth of their value. Hence why Warren Buffet makes huge money...he's a value investor. He buys stocks according to certain credentials but will always buy companies well below what they are worth, and then he waits it out when the market realizes that they are undervalues.
QEC is grossly undervalued which is why I agree with them buying shares. If they buy back another $3M worth, which would be about 3-5 million shares back, and the sp goes back up to $2, they've just made $3-5 million. They issued those PP shares at $4.70, and now they're using that money to buy back at $0.65...they're basically stealing those shares back.
There assets alone discounting Quebec should give them close to a $1 value, which is why the low target price I see for the analysts. This is about time and patience. If you got it, imo a great deal...if not, check some other stuff out and come back when things are closer to getting the go ahead. Though I'm not sure about when this shale oil is going to get going.
I just realized yesterday that in the news report it mentions they will get to use the Redleaf eco technology shale extration on other projects...and I'm guessing that's also why they got the 100,000acres of shale oil in Sask. I'm guessing they're going to apply it there.
Man if they can ramp up to 2000-3000 bbls a day, that would be huge. Sask has low drilling costs and royalties and with 100 oil we'd have a very good payday. Will be interesting to see.
Hope everyone had a great holiday!
Rocco :)
