Alamo Energy Corp. (OTC:ALME) Emerges for Another Price Rally

By StockFrontRunners on Apr 27, 2010 with Comments 6

Investors are running on Alamo Energy Corp. (OTC:ALME) again, eager for more speculation gains as another bubble seems in sight.

The monthly promotional campaign for Alamo Energy started yesterday over again. Two promoters received each the usual $90,000 in cash to boost the stock up for a week. Initial results show a success: an 13.73% increase and a closing price of $1.74, higher than the 50-day moving average of $1.48. Trading is being activated as well and the volume exceeded 500,000 share turnover.

Along with the circulating investor newsletters, marketing the stock and saying it could repeat last month’s the price rally, a press release announced last week the company has started another low-risk project with high potential by entering into a well re-entry program with WEJCO, Inc. on its Hubbard well. Any profits from the well exploitation are still not evident, but the full-fledged PR program has already showed good results in launching a furore among cautious investors.

At the end of March Alamo Energy Corp. spent more than half a million dollars on massive promotions and new exploration property announcements. The stock reached in short its highest value at $2.51, before dropping back by 45.7% a week after that.

The enormous dilution risk of the small company with limited assets cannot prevent the ongoing uptrend. According to the official filings, the latest financing obtained was $350,000 in exchange for warrants to purchase the same amount of shares of the company’s stock. With 48.67 million shares outstanding, the dilution implied is not so significant. However, the financial results of Alamo Energy, engaged in the exploration and development of oil and gas reserves, do not encourage investors to believe the company will go without additional fund raising. Sales declined by 32.67% during the last three months until January this year and earning are still on the negative side.