Is Just Energy a Hopeless Stock?

Just Energy Group Inc (TSX:JE)(NYSE:JE) saw its share price get cut in half last week after the company announced that it was restructuring and it has received creditor protection in the U.S. under chapter 15 bankruptcy laws.

The winter storms in Texas last month proved crippling on the company's business, forcing it to seek help from regulators. The company is still continuing on with its business and will attempt to restructure its financial obligations.

However, it's an uphill climb for the company from here on out and there are no guarantees it will be able to come out from under its current challenges. In February, it forecasted a $250-million lU.S. loss as a result of the storms and heightened electricity prices.

That's a big chunk when on Dec. 31, 2020, the company had cash and cash equivalents totaling just $66.6 million. Just Energy wasn't a terribly great investment of late anyway, having now posted losses in three of its last four quarterly results.

The company also announced on March 10 that both the Toronto Stock Exchange the New York Stock Exchange are looking to delist its shares.

There isn't really any reason to be optimistic on this stock. It may come out of bankruptcy and restructure successfully but this is a case of an already risky stock becoming an even worse investment. It may be hard to part ways with the stock if you have incurred significant losses but getting something for it may be better than nothing – which is what you may end up with if you are committed to hanging on.