Does The Latest News From Denbury Resources Make It One Of The Penny Stocks To Buy Or Avoid This Month?
Penny stocks are incredibly volatile and this is why investors are so attracted to them. But it’s important to keep in mind that there are certain industry trends that can help or hurt stocks. It has been a great time to be an oil drilling company over the past few months. That was due to the rising price of oil, it has not been the case for some companies.
Denbury Resources Inc. (DNR Stock Report), for example, had been in a downward spiral for a long time. It had tried to resurrect its business by completing a mega-merger with Penn Virginia. But has it made it one of the penny stocks to buy this month?
Penny Stocks: Key Analysis
That deal did not materialize and now the company has to completely reorganize its plans for the future. Therefore, it’s important to have a closer look at what Denbury Resources has stated about its plans for the next five years.
Keep in mind that this is one of the penny stocks that has recovered from all-time 2019 lows since August. As a matter of fact, from August 7th to this past week, shares of DNR stock have jumped back by as much as 34%. This is from lows of $0.87 to as high as $1.17. Previous to this, shares of DNR stock had briefly touched highs of $1.21
The rationale behind the merger with Penn Virginia was that the two companies had completely opposing methodologies of drilling oil. It was believed that the merger could unlock a lot of value. While Denbury used carbon dioxide, Penn used fracked wells.
Furthermore, the addition of the assets from Penn would have improved Denbury Resources to a large degree. Now that it is not going to happen, the company has decided to go for fiscal discipline in order to achieve its goals over the course of the next 5 years.
What Does The Future Of Denbury Resources Hold?
Denbury is working diligently to improve its debt pile. The company has been using instruments like an extension of maturities and replacement of bonds with a debt of the convertible nature, to alleviate the situation. Denbury is now working slowly but surely to improve the situation. But is it unlikely that big changes are going to be witnessed on the balance sheet at any time soon?
If it is continued over a longer period, then it might start to bear fruit. In addition to that, the company also has a range of drilling projects in the pipeline. That could help it in ticking its earnings along while it tries to bring the debts under control in the next five years. Is this one of the penny stocks to buy or avoid this month?
Well, according to the popular trading application, Robinhood, DNR stock is one of the most popular penny stocks to watch in September. Given this, at least we can safely say that many are monitoring the moves of this company.