The Razor's Edge

2-Year Price History

A Word Of Caution

Stocks trading for less than $1 are loosely termed "penny" stocks. Blast Energy Services Incorporated (BESV) is selling for less than $1 per share. While, we stand by our ratings methodology for long term value investors, often times "penny" stocks will be more volatile. Because many "penny" stocks are lightly traded their stock price can fluctuate because of a single large trade. Also, there is generally less analyst coverage of such "penny" stocks and thus less information from which to base our rating.

Therefore, (and as always), check additional sources and available information regarding Blast Energy Services, Inc. before making an investment decision.

Ockham's Rating

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BESV Revenue

As we have often noted, in our valuation methodology, "Cash is King." Well, it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 5 years. For, BESV the high and low end of the Price to Sales per share ratios are 34.58x and 7.20x respectively.

Notice that BESV's current Price to Sales per share ratio is 28.00x, which is high enough compared with historical norms of BESV to cause some concern. The current Price to Sales per share is near the upper end of the historical range. In our eyes, this is a negative factor because it is more likely that it will return to the normal range than continue rising outside of the range. At current sales per share levels, we would need to see a decline in the Price to Sales ratio of 34% merely to return BESV to its historical average.

BESV Cash Earnings

Price to Cash Earnings analysis is inappropriate for this company due to an insufficient positive cash earnings history. Rather than calculating a potentially misleading Price to Cash Earnings analysis, we have chosen to give BESV a neutral Price to Cash Earnings outlook at this time. However, we should point out that this metric is a significant element in Ockham’s methodology to analyzing the outlook for any company. Therefore, for BESV, our assessment is now more dependent on the Price to Sales analysis, and investors should be cautious with a company with very limited, if any, positive cash earnings.

BESV Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for BESV to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis. BESV is not paying a dividend at this time, nor do they have a history of paying a dividend for the last 10 years plus. Therefore, we are not utilizing the dividends portion in our study. If BESV initiates paying a dividend, we will begin to factor this into the Ockham approach.