Check the share price history yourself on Yahoo Finance. ALME dropped from $1.17 on June 30, 2010 to $0.33 today. Net income has been increasingly negative since 2008. Free cash flow is also negative; the company's recent sale of low-producing wells to raise cash is notable once we do some basic math. Netting $160K for well interests that produced 1600 bbls in a year values the recoverable resources at $100/bbl, a fair value given the current WTI spot price near $100. The bad news is that, given the burn rate implied by their quarterly cash flow from operating activities, that $160K will last about three or four months. The company only had $86K cash on hand at the end of July 2011 (according to their 10-Q for Sept. 14, 2011), so they will need to sell more non-core assets by February 2012, go further into debt (not good given their long-term debt load of $1.16M), or dilute shareholders by issuing more stock.
The Natural Contrarian ignores this very unflattering picture. It reaffirmed a Strong Buy rating for ALME this past summer. I have access to the exact same publicly available information as that newsletter but I cannot be so confident in Alamo Energy's chances for success. I'm trying really hard to be nice here.
Full disclosure: No position in ALME, ever.