Oil Stock To Buy? Not Falcon Ridge Oil Technologies (FROT)!

| December 17, 2014 | 0 Comments

cautionHe’s at it again…

My mailman just delivered another glitzy stock promotion mailer from the Moskowitz Report.

As you may recall from my recent write-up on Virtus Oil and Gas (VOIL), Mr. Moskowitz is being paid to promote suspicious oil and gas companies.

Why am I wasting my time with the oil companies Mr. Moskowitz promotes?

With energy stocks trading at depressed levels, investors are on the lookout for the best undervalued oil and gas stock to buy. 

But Mr. Moskowitz’s biased reports can make matters confusing.

Instead of buying legitimate oil and gas companies with a solid chance of achieving outstanding long-term capital gains, unsuspecting investors may funnel their money into dubious companies promoted by Mr. Moskowitz.

I’m here to set things straight.

So without further delay, let’s get to this week’s energy stock to avoid…

The company in question is Falcon Ridge Oil Technologies (FROT).  According to Mr. Moskowitz, FROT “holds the key to the entire future of America’s oil boom!”  That’s because Falcon Ridge purportedly holds patents to a “…breakthrough well-completion technology…”

I won’t get into the viability of the company’s patents here.

All I need to do is look at Falcon Ridge’s financial statements to see if their stock is worth your hard earned money.

First of all, FROT trades on the over-the-counter market (OTC).  As I explained here, OTC stocks should be approached with a large dose of caution since they don’t have the same strict SEC reporting requirements as major exchanges.

That’s the first red flag for FROT.

But that’s just the start of it…

According to their most recent quarterly report, Falcon Ridge created $1,000 in revenue for the period ending August 31st, 2014.

If Falcon Ridge truly has a breakthrough well-completion technology as Mr. Moskowitz suggests, their sales team is doing a horrible job of selling it. 

The balance sheet is even worse…

As of August 31st, 2014, the company had a whopping $1,000 in cash.  Net receivables come in at $11,000.  As a result, total current assets are $12,000.

What about current liabilities?

… $1.8 million.

Folks, Falcon Ridge Oil is at serious risk of bankruptcy.  Without a serious capital injection, the company will likely fall into the dustbin of history in the not-so-distant future.

Let’s look at a chart…

Oil stock to buy, a chart of FROT

As you can see, Mr. Moskowitz’s promotion campaign pushed FROT from $0.40 in early October up to $1.30 a few weeks ago.  Anyone who got in early made a killing.  But with shares currently trading in the $1.10 area, it’s unlikely there’s much upside left.

In fact, I’m willing to bet FROT trades back at $0.40 or lower before this is all said and done.

Why?

The company’s shares are moving higher on nothing but hype.  Falcon Ridge’s financial results do not support a 200% gain in a matter of months.

It’s important to note The Moskowitz Report was paid $7,500 for their report on FROT.

Bottom line…

There are a plenty of great energy stocks trading at deeply undervalued levels right now.  If you’re looking for an oil and gas stock to buy, do yourself a favor and avoid this one!

Until Next Time,

Justin Bennett
Commodity Trading Research

BIO:  Justin Bennett is the head commodity research analyst at CommodityTradingResearch.com.  With over a decade of real world trading experience, he finds ways for you to consistently profit from movements in commodities and the companies producing them.  Sign up for our free reports and commodity newsletter at https://commoditytradingresearch.com/free-sign-up.

 

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Category: Energy

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.