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Two SCI papers by Pritchard at MIT:
Pritchard, et.al, 2010. Establishing a model spinal cord injury in the African green monkey for the preclinical evaluation of biodegradable polymer scaffolds seeded with human neural stem cells. Journal of Neuroscience Methods, vol. 188, p. 258.
http://invivotherapeutics.com/pdf/jnmarticle.pdf
(Abstract: A segmental thoracic (T9-T10) spinal cord hemisection was created and characterized in the African green monkey...Four monkeys were evaluated (one receiving no implant at the lesion site, one receiving a poly(lactide-co-glycolide) (PLGA) scaffold, and two receiving PLGA scaffolds seeded with human neural stem cells (hNSC).)
Pritchard, 2012. Biomaterials for protection and repair of the central nervous system. Submitted to the Department of Chemical Engineering in partial fulfullment of the requirements for the degree of Doctorate in Chemical Engineering Practice. Massachusetts Institute of Technology.
http://dspace.mit.edu/bitstream/handle/1721.1/76904/824133007.pdf
(Thesis advisor: Dr. Robert Langer. Abstract: An injectable hydrogel for controlled release of methylprednisolone was designed based on the inflammatory response during acute spinal cord injury.)
Looks like my prediction was spot on: Rangebound near $3.95 to $4.00, which is roughly the PPS range where NVIV should be at now that folks came back to their senses and recognize the date of the uplisting is yet to be determined.
Dip because false uplisting rumor expires tomorrow.
Before the rumor the stock was at $3.95 to $4.00, which is roughly the PPS range where NVIV should be at now that the date of the uplisting circulated by rumor is known to be false.
When dealing with a strong catalyst stock like NVIV, normal chart levels for supply/demand or support/resistance don't work, as price depends on removing risk as each catalyst event comes to pass, and the stock is then valued higher.
There were/are 6 short term catalysts which are in the following stages of being priced into the PPS:
1) HUD/IDE appproval: FDA approved exemption, so human implants can begin. This was responsible for the rise from a pre-approval baseline of $2.25 to $2.52, up to a temporary $2.85 to $3.25 baseline before the next catalyst in sequence.
2) Company announcing intention to uplist in next 60 days. This was responsible for the next PPS rise up to a new temporary baseline between $3.62 to $3.99, based on that news alone.
3) Company announcing end of period to call in warrants, and receipt of $16M cash from warrant conversions to fund operations through 2014, and affirming that they are now in a position to uplist based on their market cap not impacted by warrant derivative liability to meet uplisting criteria. This news was responsible for the rise up to a PPS range of $3.95 to $4.30.
4) Rumor that uplisting would be June 10 or June 13, stated as "if uplisting occurred" but nonetheless incited speculation. Responsible for rise to the price of $4.75. Now that June 12 has arrived and there is no announcement indicating uplisting this week, the market sold the rumor as being false, and price returns back to the previous level of $3.95 to $4.30 until the next catalyst event.
5) Expected uplisting, as stated by CEO, was 60 days from early May. When this finally comes to pass, the stock should run to between $4.95 and $5.50.
6) Start of patient implants, as stated by CEO, is expected to be on or before July 4. When this is announced, the stock should run another $0.50 to $1, depending on how the PR is discussed. Assuming uplisting has occurred prior to this news, the stock should run to between $5.45 and $6.50.
The grand finale will be when preliminary results of patient trials are released. If no major negatives are released (which is not expected because the biopolymer scaffold is not expected to harm humans based on use of the same materials in other surgical implants other than the spine, and based on no negative responses in monkeys), then all that matters is having just one of 5 patients show some major metric of improvement in lower extrement function after acute injury-induced paralysis. Dependng on when the preliminary results come out - which the CEO says should be in late August - and depending on whether the reported improvement is significant - toe wiggling versus unassisted standing in one or more patients, this news, when coupled with appropriate multiple media channels, could drive the stock from the $5 or $6 range all the way to $10 or $15.
Gold verus Palladium miners.
The price of gold is heavily manipulated and largely based on sentiment of traders and gold investors. In contrast, palladium prices are largely determined by industrial demand, around 70% of which is based on usage in catalytic converters, although other uses (e.g., Jewelry) are also significant. Palladium metal prices are decoupled from and do not correlate with gold/silver prices. Hence, investing in palladium miners does not carry the same macro factors as are involved in gold/silver miners. For the last couple years, palladium demand has been increasing and prices have had good support and are experiencing an uptrend that is expected to last at least until 2017.
Russia and South Africa account for the lion's share of palladium production, although Russian mining has been experiencing a depletion and South African miners have been lagging due to labor unrest and political issues. North American Palladium (PAL) is a Canadian miner, which is one of the two largest palladium mines in the world.
Palladium miner, $PAL good entry now for a medium swing trade, now to mid-August. On Friday PAL announced financing to allow them to finish Phase 1 of expansion of their existing LDI mine in Ontario. Popped last Friday 1.10 to 1.33, then a fade selloff which was way overdone at the close because of 15 percent interest terms in the deal. However, North American Palladium is very close to finishing phase 1 expansion -- already 750 feet out of the 850 feet shaft is complete and aboveground processing equipment/facilities are complete. This will increase palladium production from current 160,000 oz/yr. by +50%. One of two major producing mines in world, COP currently $490/oz, will drop to high 200s after expansion.
Prior to financing deal stock had fallen $1.80 to $1.10 on fears that they would require severe dilution or go bankrupt. So 40c to 60c was priced into the stock because of the worst case risks when pps recently hit the range of $1.00 to $1.10. Now that phase 1 of expansion will be completed with new financing, the stock has now been de-risks and should run to $1.70-$1.80 as milestones are announced, beginning with announcement of shaft completion in August (already 750m towards 850m at completion). Eventually PAL will reach $2.50 after phase 1 expansion in full operation. Remember, PAL is already producing 160,000 oz/yr and palladium metal prices are driven by industrial demand growth for catalytic converters.
Gold verus Palladium miners.
The price of gold is heavily manipulated and largely based on sentiment of traders and gold investors. In contrast, palladium prices are largely determined by industrial demand, around 70% of which is based on usage in catalytic converters, although other uses (e.g., Jewelry) are also significant. Palladium metal prices are decoupled from and do not correlate with gold/silver prices. Hence, investing in palladium miners does not carry the same macro factors as are involved in gold/silver miners. For the last couple years, palladium demand has been increasing and prices have had good support and are experiencing an uptrend that is expected to last at least until 2017.
Russia and South Africa account for the lion's share of palladium production, although Russian mining has been experiencing a depletion and South African miners have been lagging due to labor unrest and political issues. North American Palladium (PAL) is a Canadian miner, which is one of the two largest palladium mines in the world.
Palladium miner, $PAL good entry now for a medium swing trade, now to mid-August. On Friday PAL announced financing to allow them to finish Phase 1 of expansion of their existing LDI mine in Ontario. Popped last Friday 1.10 to 1.33, then a fade selloff which was way overdone at the close because of 15 percent interest terms in the deal. However, North American Palladium is very close to finishing phase 1 expansion -- already 750 feet out of the 850 feet shaft is complete and aboveground processing equipment/facilities are complete. This will increase palladium production from current 160,000 oz/yr. by +50%. One of two major producing mines in world, COP currently $490/oz, will drop to high 200s after expansion.
Prior to financing deal stock had fallen $1.80 to $1.10 on fears that they would require severe dilution or go bankrupt. So 40c to 60c was priced into the stock because of the worst case risks when pps recently hit the range of $1.00 to $1.10. Now that phase 1 of expansion will be completed with new financing, the stock has now been de-risks and should run to $1.70-$1.80 as milestones are announced, beginning with announcement of shaft completion in August (already 750m towards 850m at completion). Eventually PAL will reach $2.50 after phase 1 expansion in full operation. Remember, PAL is already producing 160,000 oz/yr and palladium metal prices are driven by industrial demand growth for catalytic converters.
Palladium miner, $PAL good entry now for a medium swing trade, now to mid-August. On Friday PAL announced financing to allow them to finish Phase 1 of expansion of their existing LDI mine in Ontario. Popped last Friday 1.10 to 1.33, then a fade selloff which was way overdone at the close because of 15 percent interest terms in the deal. However, North American Palladium is very close to finishing phase 1 expansion -- already 750 feet out of the 850 feet shaft is complete and aboveground processing equipment/facilities are complete. This will increase palladium production from current 160,000 oz/yr. by +50%. One of two major producing mines in world, COP currently $490/oz, will drop to high 200s after expansion.
Prior to financing deal stock had fallen $1.80 to $1.10 on fears that they would require severe dilution or go bankrupt. So 40c to 60c was priced into the stock because of the worst case risks when pps recently hit the range of $1.00 to $1.10. Now that phase 1 of expansion will be completed with new financing, the stock has now been de-risks and should run to $1.70-$1.80 as milestones are announced, beginning with announcement of shaft completion in August (already 750m towards 850m at completion). Eventually PAL will reach $2.50 after phase 1 expansion in full operation. Remember, PAL is already producing 160,000 oz/yr and palladium metal prices are driven by industrial demand growth for catalytic converters.
Bounce trade on $PAL…palladium mine, financing announced Friday. High interest terms, but they are 750 feet out of 850 feet shaft complete and aboveground processing equipment/facilities complete. This will increase production from current 160,000 oz/yr. by +50%. One of two major producing mines in world, COP currently $490/oz, will drop to high 200s after expansion. Popped last Friday 1.10 to 1.33, fade selloff overdone at the close. Prior to financing deal stock had fallen $1.80 to $1.10 on fears that they would require severe dilution or go bankrupt. So 40c to 60c was priced into the stock because of the worst case risks when pps recently hit the range of $1.00 to $1.10. Now that phase 1 of expansion will be completed with new financing, the stock has now been de-risks and should run to $1.70-$1.80 as milestones are announced, beginning with announcement of shaft completion in August (already 750m towards 850m at completion). Eventually PAL will reach $2.50 after phase 1 expansion in full operation. Remember, PAL is already producing 160,000 oz/yr and palladium metal prices are driven by industrial demand growth for catalytic converters.
$PAL selloff on Friday's news is overdone. Since they are so close to production, smart money will buy here.
A 10% dilution typically triggers a sell-off in a mining stock. However, since there has been a finite risk of bankruptcy and/or a severe dilution priced into the stock ever since the decline from $1.60 - $1.80 range, the financing deal announced on Friday effectively de-risks the stock from here to the end of the year, and assures that PAL will have sufficient funds to start palladium production in their mine. Smart money realizes the sell-off was overdone and this is actually a great ground-floor price opportunity to buy a mining stock that is very close to beginning production. Palladium metal prices have not correlated with gold because of its critical industrial uses and limited world supply, which have been supporting and driving an upward movement in the price of the metal.
$PAL selloff is overdone. Prior to Friday's financing deal, the risk of a potential bankruptcy and/or severe dilution was baked into the PPS by at least 40 cents to 60 cents per share.
While a knee-jerk selloff is a typical reaction to 10% dilution in a mining stock, astute investors will realize that PAL is now assured of completing their palladium mine and going into production before the end of this year. This one fact effectively de-risks the stock from here to the end of the year. Palladium metal has not and will not correlate with gold price deterioration due to critical industrial uses and a very limited world supply, which have been supporting and driving up the price of the metal. I expect smart money knows this already and will begin buying PAL over the next week. The knee-jerk reaction to the news creates a great ground-floor opportunity for a miner that is very close to beginning production. Just my opinion.
$MGT: By end of year, MGT to launch mobile platform for wagering on skill-based games, legal in 36 states & many countries. http://finance.yahoo.com/news/mgt-capital-investments-inc-announces-194200388.html
$NVIV: SeekingAlpha article out today: http://seekingalpha.com/article/1475411-2-near-term-catalysts-to-propel-invivo-shares-higher
$NVIV: THREE Major catalysts next 5 weeks (warrants finished, uplist, 1st patient implants). It doesn't get much better than that for consecutive catalysts.
Warrants will all be called in as of JUNE 3, so warrant selling will be done as of THIS MONDAY. The UPLISTING CLOCK ticks towards sometime in June - also a HUGE catalyst for exposure. The START of PATIENT IMPLANTS has been promised to occur within about 5 weeks (BY JULY 4). I fully expect that the stock will hold its gains as it grinds steadily upwards as these catalysts become more and more imminent. If you are not in now, you will regret it.
$TGTX: recent Forbes article - buyout candidate: http://www.forbes.com/sites/genemarcial/2013/05/27/tiny-biotech-developing-drugs-akin-to-biogens-rituxan-seen-as-potential-buyout-bet/?partner=yahootix
$TGTX: Uplisting debut on the big board today. Expecting a nice pop. Solid biotech play with recent Forbes article as a buyout candidate.
$MGT: Just started a stealth breakout on large bids. Monday starts newsweek after warrant deadline. Target $6 - $7.50
$NVIV Fast track will derail short thesis: Already got device approval, have green light to start trials.
NVIV is not your garden variety biotech drug approval cycle, with the interminable delays and fears from NDA to PFUDA. In most biotechs, these are treated like make-or-break moments. In the case of NVIV, clinical trials have the green light to begin, since they already have their device approved (HUD and IDE granted).
Furthermore, the outcome of those trials won't be judged by the harsh criteria of drug treatments, given their device exemption status. All that has to be shown is that the biopolymer scaffold does no further harm to patients with spinal cord injury undergoing treatment and some limited measures of success, not held to the same high standards of statistical significance that are embedded in the regulatory mechanisms for drug approval.
Hence, since they have already proven in multiple animal studies that monkeys were not harmed and that the device could be successfully implanted by a trained surgeon, and have shown 5 or 6 measures of improvement on scores of lower extremity function, it will not be difficult to show the same in the initial human trials.
Biotech shorters, beware: This company is not in the same risk category of the drug approval pathway. While risk/reward pre-clinical trials would normally favor a short over long in the near-term by a factor of 3 to 5, in this case there is zero risk clinical trials won't start, and very, very low risk of any demonstrated further harm to human patients being treated for acute spinal injury given the 3 series of successful tests conducted in primates. NVIV's path to success has been shortened by 3 binary risk events compared to a drug development story, and shortseller's risk reward here is NOT the same as with a biotech drug approval stock.
I seriously don't think NVIV has any risk of not being approved by the IRB associated with Massachusetts General Hospital because one of the founders of NVIV, Joseph P. Vacanti, M.D., is affiliated with Massachusetts General Hospital.
$DARA: Sheff likes this biotech. Beginning to turnaround yesterday, consistent with a chart bottom that has been tested many times.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86906304
Slight uptick in buying on DARA yesterday. Consistent with a chart bottom in low 0.70s, which has been tested many times.
DARA..$.76..will be a solid play for those willing to hold it longer-term.
$DARA: Price within 0.02 of strong demand level: Chart bottom was tested 5 separate times from November 2012 thru January 2013. Each time this happened, rapid rebounds from 0.75 to 0.78 PPS level demonstrated big money bought fast whenever price hit the this level.
$REGI: High profits this year, $22 valuation:
http://seekingalpha.com/article/1331471-renewable-energy-group-and-syntroleum-alpha-generation-and-intelligent-way-to-hedge-rin-risk-of-independent-refiners
$NVIV Watch monkeys walk after paralysis, TV show shows recovery after treatment with biopolymer scaffolding device. Just received FDA approval as HUD/IDE so company is approved to start clinical trials this summer. Expedited study, a lot of eyes watching this. Human/monkey spinal structure nearly identical and biopolymer successfully allowed monkeys to recover and walk again in three separate studies.
Watch TV interview with CEO and footage of monkey before versus after treatment:
http://www.wcvb.com/health/Human-trials-offer-hope-those-with-paralysis-will-walk-again/-/9848730/19699936/-/l72lh7/-/index.html
Since the warrants have 5 years to be redeemed, one can make the argument that share price in the future will be much higher than present share price. Therefore, consider two options for the owners of units consisting of one share plus one warrant:
1) Continue to hold the warrants as stock price moves upwards well past the threshold for redemption of $2.80. Then when stock price reaches some higher value, arbitrarily for argument's sake let's say about $4, then sell a fraction of their shares sufficient to raise enough cash to redeem all N of their warrants (1.40/4.0) and use the proceeds to redeem all of their warrants, which now would give them a total of N x (4 - 1.4)/4 remaining old shares plus N redemption-issued shares, yielding (8 - 1.4)/4 x N = 1.65N total shares held at a market value of $4, with the net transaction at no additional cost to the holder.
2) Redeem the warrants as soon as price surpasses $2.80 for 20 consecutive days, then sell a fraction of their shares sufficient to raise enough cash to redeem all N of their warrants at the current price, for argument's sake let's say $3.00, which would now give them a total of N x (3 - 1.4)/3 remaining old shares plus N redemption-issued shares, yielding (6 - 1.4)/3 x N = 1.53N total shares held at a market value of $3, with the net transaction at no additional cost to the holder.
Since the 2010 warrants can be redeemed any time over the next 5 years when stock prices are above $2.80, it would make sense to hold out to redeem when stock price is highest, if in fact the holder desires a transaction which does not require them to invest any additional cash to convert. The difference in this case is (1.65 - 1.53) x N = 0.12 x N shares. Since the odds of price appreciation are clearly in favor of NVIV shareholders at this point, it would be prudent to wait.
This kind of scenario is not always the most advantageous strategy for warrant holders. Consider, for example, the hypothetical case where stock price had somehow managed to exceed $2.80 for 20 consecutive days but HUD approval and IDE approval had not yet been granted, and possibly in conjunction with a product that had not showed such clearly unambiguous demonstration of success such as occurred in the Green Monkey trials prior to getting ready for human clinical trials. In such a case a warrant holder might have elected to minimize the risk that share price might never get to $4 in the event that HUD and IDE were never going to be approved, or that clinical trials would fail. However, cashing out early would represent a lost opportunity cost of never being able to have an extra 0.12N shares without further cash investment given the potential outcome of the share price reaching $4.00.
"Redemption" is when a warrant holder decides to execute on an agreement by which he pays a certain amount (the strike price) to the company (thereby the company collecting revenue) and in return receives one share of stock. The holder of the stock may then elect to hold the stock or sell it.
And with the stock price expected to go up very substantially over the next few days/weeks as investors realize clinical trials are finally going to start, no warrant holder in his right mind would want to sell that newly received share of stock at $2.80 when the price will be worth twice that when the slightest good news hits the press to update the public on the 30-, 60-, or 90-day interim evaluations of patients undergoing clinical trials.
The SEC filing prospectus dated 4/30/12 stated there were 12M stock warrants that can be redeemed at $1.40 per share and 350,000 bridge warrants that can be redeemed at $1.00 per share. With a daily volume of 505,000 on 4/5/2013 when the IDE approval was announced, and an average daily volume over 10 days of 178,000 shares/day, if warrant holders all rushed to sell their shares, of course price would be depressed. However, given the virtual certainty that more good news will be released and larger investors will be piling in, only a very small portion of warrant holders who redeem will elect to cash out right away, since there is much more good news to occur over as clinical trials get underway. The total diluted sharecount is 65M.
$MIMV Mobile app search & discovery company executes 6 figure contract, turning point for company. 20bagger in 2 yrs. http://t.co/beRtnqdGL7
$REGI significantly undervalued SeekingAlpha:
http://seekingalpha.com/article/456401-why-renewable-energy-group-is-significantly-undervalued
Why Renewable Energy Group is significantly undervalued ($REGI) - SeekingAlpha article:
http://seekingalpha.com/article/456401-why-renewable-energy-group-is-significantly-undervalued
Renewable Energy Gp (REGI) Q1 earnings will show blockbuster $58M (about $2 EPS) retroactive blender tax credit cash from 2012 sales. Add to that blender tax credits for ongoing sales in Q1 2013, and RIN credit sold during Q1. 2012 Acquistions and capacity expansions will be coming online during Q2, leading to higher sales volumes in Q2 and Q3, and positive news releases with each event. 2013 will be a blockbuster year for REGI, which is the largest independent biodiesel producer/blender in the USA, and which operates 7 facilities, most of which are able to produce from multiple feedstocks.
$TTNP: Selloff overdone yesterday, triggered by Adam Feuerstein twits.
Should get favorable review in tomorrows AdComm FDA meeting. Safety has been established. Effectiveness has been established, meeting usual FDA goals.
An alternative reading of FDA briefing: http://seekingalpha.com/article/1288761-an-alternative-reading-of-fda-briefing-materials-on-titan-s-probuphine
Intradermal efficacy similar to effective oral suboxone for opioid dependency treatment. Greater than 90% of patients finishing treatment said they would want to continue if given the choice. After 24 weeks of treatement, 80% of patients were clean for opioid use over the most recent 2week period. 95% said their lives were improved. Article: http://bit.ly/YEBsZ9
Renewable Energy Group biodiesel RINs at record levels, sets up great margins for 2013, in combination with tax blender credits:
REGI -- "Value of Advanced RINs, which include biodiesel and Brazilian sugarcane ethanol, at a record $1.08."
http://washpost.bloomberg.com/Story?docId=1376-MJI2S91A1I4H01-4G2IO7MDCII99II461ADDMCP58
$REGI profits: "Value of Advanced RINs, which include biodiesel and Brazilian sugarcane ethanol, at a record $1.08."
http://washpost.bloomberg.com/Story?docId=1376-MJI2S91A1I4H01-4G2IO7MDCII99II461ADDMCP58
Strong Buy Rating consensus: http://www.nasdaq.com/symbol/regi/recommendations
$REGI: Strong Buy Rating consensus: http://www.nasdaq.com/symbol/regi/recommendations
EPS for 2013 around $4.60 - $5 range.
$NVIV: Fly on the wall says SeekingAlpha next week.
$DRRX partner with $PTIE and Pfizer for Remoxy: major upside on Remoxy approval for all 3, but the greatest ratio of upside would be PTIE: Ratio of annual sales to market cap is 188%. DRRX and PTIE starting the first day of a multi-day move today.
http://seekingalpha.com/article/1199861-all-you-need-to-know-about-remoxy
$PTIE partner with DRRX and Pfizer: major upside on pain medication Remoxy approval for all 3, but the greatest ratio of upside would be PTIE: Ratio of annual sales to market cap is 188%. DRRX and PTIE starting the first day of a multi-day move today.
http://seekingalpha.com/article/1199861-all-you-need-to-know-about-remoxy
$PTIE - pain partner, momo w/DRRX. pause to reload for multi-day run.
$REGI - FWD PE = 1.0. Largest biodiesel independent in US.
Market reacted to 2012 earnings because biodiesel tax blender credit was issued too late to bolster 2012 earnings, retroactive $58M or $1.70 now being added to 2013 earnings. Combine that with another $73M from 2013 tax blender credits, and you have $133M tax blender profits into a mere 34M shares. That $3.91 EPS just from the credits. Adding in real earnings from sales of RIN and biodiesel for 2013 (Q1 - Q3 EBITDA about $10M + $20M + 27M), guessing $10M for Q4, and you get an EPS of $6 with a current share price of $6.
REGI retired most of their debt in December, $66M cash. Also added capacity from acquisitions last year and adding another 150M gallons capacity this year. Renewable mandate for blending biodiesel was increased to 1.28 billion gallons for 2013 from 1.0 billion gallons for 2012. So you can see 2013 will be a good year.
GLTA.
$REGI: Forward PE 1.0 due to misunderstood 2012 earnings release for the largest biodiesel independent producer/blender.
The earnings release for 2012 came out Monday afterhours and was followed by a conference call and a PDF presentation, both of which can be accessed on the company website.
Bottom line is that the tax blender credit for renewable fuels that was passed by congress on New Year's Eve was too late to be applied as received income for the 2012 GAAP earnings.
However, $58M will be received THIS QUARTER, which adds cash income per share of $58M / 34M shares, or around $1.70 per share.
In addition, the tax blender credit is in effect for 2013 and will add even more revenue to be received in 2013 for 2013 sales. Given REGI's recent acquisitions, plus the demand growth setforth by the government's 28% increase in 2013 the requirements for blending biodiesel in the RFS2 standards, plus a healthy rebound in market prices of the trading units for biodiesel credits (RIN credits) back up to the $0.80s range according to the conference call (compared to low $0.50s for much of 2012), all of this assures that REGI will INCREASE gallons sold and blended in 2013 versus 2012 (despite seasonal variations). Expect the 2013 tax blender credits subsidy for this year to come in at or above $73M. Note congress passed the blender tax credit subsidy on New Year's Eve for 2012 and 2013.)
So before you even consider the organic profits from RIN trading and biodiesel sales, in 2013 REGI will earn an EPS soley attributable to the tax blender credit alone of $58M + $73M = $133M.
With only 34M sharecount, that's an amazing $3.91 EPS.
2013 forward earnings BEFORE taxes, depreciation, and amortization (EBITDA) were projected as Q1 = $5M-$15M and Q2 = $15-$25M. Q3 they stated would be even higher than Q2 based on historical company sales, but REGI didn't set a target. So REGI's EBITDA earnings, having nothing to do with tax credits, have an average forecast of $10M + $20M + rough guess of $27M for 3 and $10M for Q4, yields $67M for 2013.
Net earnings for 2013 estimated as $67M (organic profits) plus $133M (2 years of realized tax blender credits) = $200M.
Forward EPS for 2013 is estimated as $200M/34M shares = $6.
So REGI has a forward P/E of $6.01/$6.00 = 1.0
Now THAT's undervalued !!!!
$REGI -- Excellent entry here on misunderstood earnings for the largest biodiesel independent producer/blender.
The earnings release for 2012 came out yesterday and was followed by a conference call and a PDF presentation, both of which can be accessed on the company website.
Bottom line is that the tax blender credit for renewable fuels that was passed by congress on New Year's Eve was too late to be applied as received income for the 2012 GAAP earnings.
However, $58M will be received THIS QUARTER, which adds cash income per share of $58M / 34M shares, or around $1.70 per share.
In addition, the tax blender credit is in effect for 2013 and will add even more revenue to be received in 2013 for 2013 sales. Since given REGI's recent acquisitions, plus the 28% increase in 2013 renewable fuels blending mandate over 2012, plus given RIN prices are now back in the $0.80s range according to the conference call (which is above the low $0.50s range that they were trading during much of 2012), this means 2013 will INCREASE gallons sold and blended. Therefore expect 2013 tax blender credits to be at least $73M.
Bottom line is, even without considering organic profits from RIN trading and biodiesel sales, REGI will earn an EPS just from the tax blender credit alone in 2013 of $58M + $73M = $133M.
So forward EPS has to be AT LEAST $133M / 34M shares, or $3.91 EPS. Now factor in earnings BEFORE taxes, depreciation, and amortization have been predicted for Q1 as $5M-$15M and Q2 as $15-$25M, and Q3 as greater than Q2 but not specified. So ORGANIC earnings, having nothing to do with tax credits, on the average should be at least $10M + $20M + maybe $27M for (Q1 + Q2 + Q3), for a total of $57M.
Adding $57M from organic profits for Q1-Q3 to $133M from tax blender credit the forward EPS of REGI is now $133M + $57M = $190M.
Forward EPS for 2013 is expected to be around $190M / 34M shares = $5.50.
REGI has a forward P/E of $6.20/$5.50 = 1.13
Now THAT's undervalued !!!!
BUY TODAY BEFORE THE MARKET FIGURES OUT THAT LAST YEAR'S earnings don't matter, it's this year that counts.
FWIW, they did a pro forma adjustment on the last page of the PDF presentation and it showed IF the 2012 tax credit has been passed by congress on-time instead of after the fact and retroactive, then 2012 EPS WOULD HAVE BEEN $96M / 34M shares = $2.82
Ignore the shorts - this is a gift today; it won't last.