Encore Acquisition (EAC) Shares Rise After CEO Hires Lehman Bros. to Explore Alternatives

May 22, 2008 10:36 AM EDT

Encore Acquisition Company (NYSE: EAC) shares gain $2.70 (+4.22%) in early trading, but there has only been about 670K shares traded vs. 3 month average for full day of 1 million.

Encore's CEO said, “It is our belief that Encore’s current share price is not reflective of our record operating results and our ability to efficiently fund these projects through our upstream MLP, Encore Energy Partners (NYSE: ENP). We are determined to have the value of these opportunities recognized for our shareholders. Therefore we have retained Lehman Brothers to explore strategic alternatives, including a sale of the Company.�

However, shares have risen from $28 on Jan. 23, 2008 to $67 and change today. So, EAC has gone up 140% in 4 months and the CEO is saying the current share price doesn't reflect well???? As CNBC's Jim Cramer says, "Pigs Get Slaughtered", therefore this may be a good opportunity for investors to sell a portion of their holdings in this stock.

Other points to note...the P/E ratio of EAC is 47, total cash on balance sheet is 205.00K and revenue growth is up 109% y-over-y.

Encore Acquisition Company (Encore) is engaged in the acquisition and development of oil and natural gas reserves from onshore fields in the United States. [SM]

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