New Western Energy Corp (OTCMKTS:NWTR) Keeps its Gains For Now

9NWTRchart.pngOn Friday New Western Energy Corp (OTCMKTS:NWTR) continued to attract the attention of the market and for a second day in a row found itself among the top traded stocks. Despite the fact that most of the newsletters that were involved in last week’s pump for the company had moved on to find new targets, NWTR broke its Thursday record volume by trading almost 2.1 million shares.

The stock opened with a gap up and in early trading even went as high as $0.289 but failed to maintain such price levels and at closing time slid down to $0.25, or just 4% above the previous close. Only two pumpers sent out email alerts that day – Penny Picks and Damn Good Penny Picks. Both of them disclosed no received compensation.

PEIIchart.pngThat wasn’t the case with another company they were touting at the same time as NWTR. For $25 thousand both pumpers as well as some of the other affiliates of Damn Good Penny Picks were hired to praise the stock of Petron Energy II (OTCMKTS:PEII), also an oil and gas exploration company. As a result of the increased awareness traded volume for the company jumped from 2 million shares to more than 32 million shares on the next day. The price per share couldn’t handle the pressure though and dropped by 11%. On Friday the downward movement continued and PEII lost 8% to arrive at $0.0065.

The likelihood that NWTR might also start to correct shouldn’t be ignored. Their fundamentals are fairly discouraging although the company is capable of generating revenues. For the quarter ending June 30 they disclosed:

  • $212 thousand cash
  • $345 thousand total current assets
  • $773 thousand total current liabilities
  • $11 thousand revenues
  • $713 thousand net loss

Investors might also be hit with a considerable amount of dilution in the future. Apparently NWTR is going to increase its authorized shares from 100 million to 250 million so the room for newly issued shares is substantial.
As we said in our previous article Zacks Small-Cap Research has issued a six-month price target of $2 per share which seems rather unrealistic. That is why doing your own due diligence is paramount when contemplating investing in penny stocks.

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