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Exactly right Slash, will be announcing allowance of year-round E-15 sales, and will announce restrictions on biofuel credit (RIN's) trading that they say "undercut" the system. All good news for ethanol segment. A major argument for a while was that many gas stations were hesitant to install new pumps for E-15 or E-85 blends for the simple reason they couldn't sell it for 3-4 months out of the year. This should jump start that expansion and help out the sector immensely. Oh and Trump is on his way to a huge rally in the corn belt of Iowa, so he wanted to bring good news haha.
BOOM goes the dynamite :)
PEIX Upgrade to "Buy" at Zacks Research.
Also, great seekingalpha article here:
https://seekingalpha.com/article/4186190-will-california-carbon-credits-help-reverse-slide-pacific-ethanol-shares
Pacific Ethanol is a leading U.S. producer of ethanol.
The share prices of PEIX have seen a sentiment-crushing decline from over $10/share to under $3/share in the last two years.
It is possible that rising LCFS credits will help PEIX beat earnings estimates for the next two quarters.
This idea was discussed in more depth with members of my private investing community, Commodity Conquest.
Background
Pacific Ethanol (PEIX) is one of the leading producers of ethanol in the U.S. The consumption of ethanol is mandated by various U.S. government programs. Over the past several years, PEIX has acquired several large-scale ethanol production facilities, and now has an annual nameplate production capacity of over 600 million gallons. A March 2018 fact sheet on PEIX can be found by clicking this link; this fact sheet outlines some of the demand drivers for ethanol, as well as some of PEIX key initiatives.
Ethanol Gross Margins
The gross margins from ethanol production come from the conversion of a starch (corn or sugar) into ethanol. Ethanol is blended with gasoline at 10% (E10) to as much as 85% (E85) for retail consumption in the U.S.
Ethanol production margins can be seasonal, with dips most often occurring in Q1. Margins for 2018 Q2 – on average – are higher than they were for Q1 for U.S. production.
Renewable Fuel Standard
The RFS is the law which requires petroleum companies to blend biodiesel and ethanol with their diesel and gasoline. The RFS has seen some recent changes, and the modifications have put downward price pressure on RIN prices. This affects the biodiesel and petroleum refiners directly, and the ethanol producers indirectly. Most, if not all, of the impacts of the RIN pricing are shown in the ethanol margin graph above. Therefore, while the tone of the current RFS discussion might be considered as negative for ethanol producers, ethanol production margins have not broken to a new, lower range.
PEIX Slides To New Lows
Over the last two years, PEIX has experienced an investor sentiment-crushing fall from near $11/share to recent 3-year lows of $2.30/share. PEIX has not had positive trailing full-year earnings since 2014. Following a multi-year acquisition growth plan, PEIX finds itself with significant levels of debt.
Lack of profitability combined with meaningful debt service have contributed to the decline in share price. Here is a 3-year weekly chart with regression trend lines and the 50-week moving average.
Source: TradingView
PEIX began as a west coast operation, but over the past few years has acquired several facilities in the Midwest. Some of its plants are older and less efficient than other producers. Its west coast facilities lack economies of scale and have higher delivered costs of corn than a typical Midwest ethanol plant. On the other hand, PEIX’s west coast facilities benefit from additional renewable energy credits and the value these credits have been rising for about a year.
Rising LCFS Values
The values of Low Carbon Fuel Standard (“LCFS”) credits have increased substantially in the California market, and this should help improve average PEIX production margins.
Source: Viking Analytics
Earnings Forecast
As a result of generally higher ethanol margins for Q2 and rising values of LCFS credits, we have currently forecast that PEIX will beat analyst expectations for Q2 and Q3 earnings. With improved profitability, PEIX will also see improving debt coverage ratios.
The total fleet value of PEIX facilities is currently under $0.50/gal of production capacity, which is substantially less than the replacement value. As a result, one might view PEIX to be fundamentally under-valued.
PEIX often under-performs analyst and investor expectations, so investors may want to be cautious with any long positions. Nevertheless, we believe that the risk-reward supports the consideration of long position ahead of the next earnings release.
Commodity Conquest
In my Commodity Conquest service, I publish a daily commodity report for gold, crude oil, natural gas, and agriculture. I also do in-depth coverage of eight energy firms.
My verifiable trading record from on all completed trades through July 5th has included a win rate of over 65% with an average annualized return of 79%.
Disclaimer
This article was written for information purposes and is not a recommendation to buy or sell any securities. I never intend to give personal financial advice in any of my articles. All my articles are subject to the disclaimer found here.
Disclosure: I am/we are long PEIX.
Bought more at $2.50 myself...too many potential tailwinds for this stock IMO to be at a 52-week low. RFS proposals didn't decrease at all, with all the fire Pruitt has been under (including lawsuits), his refiner exemptions should basically be non-existent any more, no-reason-not-to-be-approved cellulosic ethanol production at other 2 plants, exports off the charts with no signs of slowing, and all these capital expenditures will start to pay off (selling of CO2, the huge solar panel array to tremendously reduce energy costs + solar energy tax credits), and as always, let's not forget the current ~$.12 CARB credit for every ethanol gallon they sell in CA, and pretty soon OR, and that only looks to be increasing. And as of recently, oil prices have been skyrocketing, and many analysts see it continuing to closer to $90 a barrel, that can only bring the price of ethanol up as it is so much cheaper (and historically they rise/fall directly proportional) How this stock cannot see $5-$6 bare minimum SOMETIME before this year ends would absolutely befuddle me, which represents a double on investment. Obviously, high side is more around $10 potentially.
The 2 investment phrases I love to live by are:
Be fearful when others are greedy, and be greedy when others are fearful.
Don't buy any stock you wouldn't be willing to hold for at least a few years.
I have no problem holding this stock, as ethanol isn't going anywhere, and i'm going to be greedy since others are apparently fearful as evidenced by the stock price. Sure eventually the electric car market will start to impede, but lets remember that currently they are not affordable/practical to any but the upper middle class and higher (generally speaking), and we are but one country in the world, most of the other world cannot even begin to imagine affording those, and they are just NOW catching up to the rest of the world by implementing ethanol standards for their gas. The little effect electric cars may have on U.S. and the handful of other developed countries that can support them is WAY offset by the rest of the world catching up by reducing oil consumption by supplementing ethanol.
DISCLOSURE: I've been visiting this forum for years...regularly. I don't post much, but constantly follow, and been on and off PEIX for the last 5 years, through the dark penny days and through the $24 glory days haha.
Well that was a quite interesting last 3 trading days. For no reason at all to me, it decides to go down 10% on a day they announce good news (agreement to sell CO2 from Stockton, adding to co-product haul with virtually no up-front investment costs), then decides to recover some on Friday, and now it appears with some large insider BUYING it decides to shoot up 15% today.
I've been following and owning PEIX for years, and have no idea how just 3 days ago they were almost $3 for a market value of barely $140 million with $50 million cash on hand and 8 plants, haha but whatever. I just bought more at $3.60 a week ago, because they are severely undervalued. I don't know if we will see the $20 glory days some of you might remember from a few years back, but absolutely no reason they can't get back to $8-$10 range this year, realistically.
Wow, amazing news! If you actually read the terms of that debt refinance press release, the details are amazingly bullish! That looks like one of the smartest financial moves i've seen PEIX make since i've owned the stock over the last 5 years. I'm so excited for once in a long time. I see it breaking $15 sometime in the 1Q17. With oil prices rising from output cuts, ethanol blending requirements increased, and overall positive crush spread and co-product return/cost-saving measures....i see nothing but positive earnings reports for a good run.
EIA report looks good...Ethanol inventories down -2.7% from 19.0 to 18.4 million barrels. Corn futures still under $3.40 a bushel, ethanol futures hovering around $1.60, looking really positive.
Corn prices took a nosedive today...maybe end of the month future contracts? Good news for ethanol, it was only down slightly.
http://www.nasdaq.com/markets/corn.aspx?timeframe=7d
EPA Completes Rule Requiring More Ethanol Blended Into 2017 Gasoline Supply
WASHINGTON—Federal regulators finalized a rule Wednesday that raises the amount of ethanol refineries must blend into the nation’s gasoline supply, providing a boost to ethanol companies and drawing criticism from an oil industry that opposes higher levels.
The Environmental Protection Agency issued a final regulation, first proposed in May, requiring refineries to blend 19.28 billion gallons of corn-based ethanol and other biofuels into the gasoline supply in 2017.
That amounts to 1.17 billion gallons more than the requirement for this year, which was 18.11 billion gallons, but it is far less than the 24 billion gallons envisioned by a 2007 law. The EPA is using a waiver in that law allowing the agency to set lower amounts for a variety of reasons, including slower-than-expected development of certain kinds of non-corn biofuels.
The Renewable Fuel Standard, or RFS, first established by Congress as part of a 2005 energy law and significantly expanded in 2007, was designed to help reduce carbon emissions and wean the U.S. off foreign oil by requiring refineries to blend an increasingly large amount of biofuels into the nation’s gasoline supply each year. The EPA, which Congress gave the authority to enforce the mandate, has struggled in recent years to implement it, given the oil boom over the last decade and lack of biofuels infrastructure, among other factors.
Unlike most energy regulations proposed or issued by the Obama administration, President-elect Donald Trump has at times expressed support for the mandate. He won corn-rich Iowa in both the primary and general elections due in part to his stated support for the policy. Iowa’s GOP leaders are some of the biggest supporters of the mandate, which is fulfilled almost entirely by corn-based ethanol.
That said, if incoming Trump administration officials do want to review and rewrite the latest quotas for any reason, Mr. Trump and GOP leaders in Congress have several avenues for blocking Mr. Obama’s recently completed rules, including this one.
Congress could use a little-known law called the Congressional Review Act to nullify rules that have been finalized within 60 days in which Congress is in session, a period that often extends much longer than a couple of months, since lawmakers aren't in session every weekday.
Given that the GOP controls both chambers of Congress and the White House, this could be one of the easiest ways to undo Mr. Obama’s regulatory agenda. Some legislative experts say rules issued as far back as May could fall under the 60-day window, because Congress has been in session so few days the second half of this year.
Still, Nov. 20 has been considered the clearer deadline by which the Obama administration must issue rules before the window opens for the incoming Trump administration to stop the rules unilaterally. That is because most regulations requires at least 60 days between a rule being finalized and its taking effect, and if a new administration steps in during that interim period, the incoming president can indefinitely postpone on the rule’s effective date.
Groups representing biofuel companies cheered the news, while the oil industry called on Congress to repeal the policy. Any major overhaul or repeal is unlikely any time soon given the stark divisions across party lines in Washington.
“The move will send a positive signal to investors, rippling throughout our economy and environment,” said Bob Dinneen, president and CEO of the Renewable Fuels Association. “By signaling its commitment to a growing biofuels market, the agency will stimulate new interest in cellulosic ethanol and other advanced biofuels.”
Shares in ethanol companies, including Green Plains Inc. and Pacific Ethanol Inc., climbed after the EPA’s announcement Wednesday morning.
The American Fuel & Petrochemical Manufacturers, which represents refineries that are required to blend the ethanol, criticized the announcement and called on Congress to undo or overhaul the policy.
“EPA unfortunately finalized a RFS volume requirement that looks to force more biofuel in the fuel supply than consumers want or infrastructure can handle,” said Chet Thompson, president of the association. “Refiners should not have the responsibility to force consumers to use products they either don’t want or that are incompatible with their cars, boats, and motor equipment.”
Good EIA report today:
Ethanol stocks -2.6%
Oil stocks -0.3%
PEIX 1Q 2016 Earnings:
Financial Results for the Three Months Ended March 31, 2016
Net sales were $342.4 million for the first quarter of 2016, an increase of 66% when compared to $206.2 million for the first quarter of 2015.
Cost of goods sold was $341.3 million for the first quarter of 2016, compared to $207.2 million for the first quarter of 2015.
Gross profit was $1.1 million for the first quarter of 2016, compared a gross loss of $1.0 million for the first quarter of 2015.
Selling, general and administrative (SG&A) expenses were $8.3 million for the first quarter of 2016, compared to $4.9 million for the first quarter of 2015. SG&A expense was higher due to the acquisition of the Midwest assets and an increase in seasonal professional fees.
Operating loss for the first quarter of 2016 was $7.2 million, compared to $5.9 million for the first quarter of 2015.
Interest expense, net for the first quarter of 2016 was $6.2 million, compared to $1.0 million for the first quarter of 2015. This increase is attributable to the term debt assumed with the acquisition of Aventine.
There was no provision for income taxes recorded for the first quarter of 2016, whereas a $2.7 million benefit was recorded for the first quarter of 2015.
Net loss available to common stockholders for the first quarter of 2016 was $13.5 million, or $0.32 per share, compared to $4.7 million, or $0.19 per share, for the first quarter of 2015.
Adjusted net loss was $13.6 million for the first quarter of 2016, compared to adjusted net loss of $4.5 million in the first quarter of 2015.
Adjusted EBITDA was positive $1.6 million for the first quarter of 2016, compared to negative $2.7 million for the first quarter of 2015.
Cash and cash equivalents were $19.2 million at March 31, 2016, compared to $52.7 million at December 31, 2015.
Wow, down 12% today, that's impressive. Oil is destroying the share price, unfairly much IMO, I am seriously thinking about adding more shares this low...I mean wow.
REX down 0.5% and GPRE down 4.5% haha, good thing I don't need the money and have nothing but time on my side.
Thats big news there, really good sign, thats 750,000 gallons of ethanol per year generating D3 RIN's which are much more valuable and less crowded market. If they can apply this technology to some or all of their other plants in time, that will be a FANTASTIC boost. Add that the the increased premium they are already getting from the California sold CARB ethanol (which is set to increase over the coming years) and we are looking at a good forecast.
EPA boosts amount of ethanol in gasoline supply, that is where the skyrocket came from.
They increased the RFS levels from what they proposed in May, still less than original set by 2007 law, but a small victory nonetheless as they increased it to over 18 billion gallons, an increase of about half a billion gallons over previously proposed increase. This is one catalyst the entire industry has been waiting for.
Yeah, while there are no certainties in the stock market, there is pretty much no earthly way this goes anywhere near $1. If you remember back shortly, as i do, post-split PEIX hit about $2.30, which at that time felt stupid low and that was when they were 40% the size they are now, and corn was $5-$6. Everyone said the same thing then, this stock is falling, don't bother, its dead...etc. It wasn't even a year later and it had skyrocketed to $20.
That being said, I don't see it skyrocketing to $20 like it did then, at least not that quickly, but for certain once they get all this merger hammered out and running optimally and hedging corn at this low price, the share price will recover back to around the $10-$11 mark with more potential upside. Right now, people are either panicking/frustrated/shorting-for profit and its killing the share price unfairly. At a market capitalization of $191 million, this is is severely undervalued unless you HONESTLY believe they are going to tank and fall into bankruptcy. While I agree the management hasn't always been top-notch, they are not complete idiots. They didn't spend $184 million expanding when their books looked great before if they didn't think/know it would pay off, and with oil around $40, its the same depressing factor that the corn skyrocket had. With these companies, outside commodity factors will always cause swings in the stock price, and for some reason PEIX always seems to magnify any fluxuations, not sure why.
I saw some of you guys in at $7.50, in at $15.20....well i'm in at $11 and while i promise i do get as frustrated as you guys do sometimes and stuff just doesn't make sense, I just remind myself that I'm long. That means I have a 2 in the first digit of my age, I have nothing but time, and the money i have invested is just that, money INVESTED, not money I need for spending, so even though I'm down, I haven't lost a dime because I'm holding. Back when this hit $2, I was still fairly new to investing and had essentially written off my entire investment in this stock as a complete loss and was starting to think about other stocks, but I held and held and I was rewarded with the skyrocket to $20. I sold some, then more, then got back in at $11, so i'm not worried at all, give the market some time. ALl the stuff they are doing will eventually come to and will make for nice profit and the market will realize that and adjust the share price....eventually.
I am considering buying a little more now to bring my cost-average price down, especially if it flirts with the $4-high $3 range, it won't go much further than that, if even at all.
3rd Quarter earnings...oh boy
– Net sales grew 38% over the third quarter of 2014 –
– Record total gallons sold for the third quarter of 2015 at 211.6 million –
– GAAP net loss per share was $0.36 and adjusted net loss per share was $0.18 –
– Adjusted EBITDA was $2.4 million –
– Reflects first quarter of consolidating Aventine operations –
Net sales were $380.6 million for the third quarter of 2015, an increase of 38% when compared to $275.6 million for the third quarter of 2014.
Cost of goods sold was $388.0 million for the third quarter of 2015 and included $8.7 million in purchase accounting adjustments. These one-time, largely non-cash adjustments were related to the company's acquisition of Aventine Renewable Energy, which closed on July 1, 2015. Cost of goods sold for the third quarter of 2014 was $257.6 million.
Gross loss was $7.4 million for the third quarter of 2015, compared a gross profit of $18.0 million for the third quarter of 2014, reflecting a decrease in production margins compared to the prior year.
Selling, general and administrative ("SG&A") expenses were $7.4 million for the third quarter of 2015, compared to $4.4 million for the third quarter of 2014.
Operating loss for the third quarter of 2015 was $14.8 million, compared to operating income of $13.6 million for the third quarter of 2014.
Interest expense, net for the third quarter of 2015 was $5.2 million, compared to $1.1 million for the third quarter of 2014.
Provision for income taxes for the third quarter of 2015 was a benefit of $3.9 million, compared to an expense of $3.2 million for the third quarter of 2014.
Net loss available to common stockholders for the third quarter of 2015 was $15.0 million, or $0.36 per diluted share, and includes $8.7 million in purchase accounting adjustments. This compares to net income available to common stockholders of $3.7 million, or $0.15 per diluted share, for the third quarter of 2014.
Adjusted net loss was $7.5 million, or $0.18 per diluted share, for the third quarter of 2015, compared to adjusted net income of $8.1 million, or $0.33 per diluted share, in the third quarter of 2014.
Adjusted EBITDA was $2.4 million for the third quarter of 2015, compared to $15.5 million for the third quarter of 2014.
Cash and cash equivalents were $53.1 million at September 30, 2015, compared to $62.1 million at December 31, 2014.
Excellent EIA Report again...
Oil inventories DOWN 0.1%
Ethanol inventories DOWN 3.7% to 18.5 million barrels. Lowest for the year.
Good energy report today
Oil inventories DOWN 0.4%
Ethanol inventories DOWN 2.1%
Anybody read the conference call presentation slides? Lots of great stuff there, really encourages me for future outlook. Among them include:
-Goal to achieve at least $1 million PER MONTH in synergy benefits/savings.
-PEIX currently receives $.04 preminum for ethanol sold in California due to their Low Carbon Fuel Standard laws, and that number is expected to increase.
-Significantly increased purchasing power to lower costs
-Improved hedging with easy access to Chicago paper markets
-
Must be a combination of heavy short covering and some speculative pre-earnings buying driving the price up today. Kinda nice to see, forgot what it looks like to be green +8%...
WOW! Supplies down almost 1 million barrels in a week! That's a big drop, biggest in almost 8 months. That's great news and I would almost guarantee this thing turns green by noon today and stays that way.
Is not done yet, they will be issuing around 17-18 million shares for the Aventine holders to convert every 1.25 shares. We will be around total 42 million PEIX shares once the merger is approved and goes through. And if I understand correctly, those shares the Aventine holders get issued are like Type B, non-voting, and they cannot sell them for 6 months.
Certainly is nice to enjoy a good day like today. Been a long time coming...hopefully the start of a nice run back to aroun $15-$16
Curious action this morning, I am very interested in what the conference call will bring...
Well that's slightly unfortunate....
beat on revenue but posted -$.19 on estimates of -$.08
I really thought it was going to be within 3 cents on either side, actually leaning towards beating with a -$.06 loss from co-products...but oh well
2nd quarter and merger is looking a lot better so it's just more of a waiting game anyways. Let's see if they can somewhat manage their losses with the conference call tomorrow with a positive outlook like GPRE did and maybe end up closing tomorrow around $11.40-$11.50?
Worked for me, thanks Rule. Great work.
Whitefox Signs Agreement with Pacific Ethanol
http://finance.yahoo.com/news/whitefox-signs-agreement-pacific-ethanol-110000843.html
Whitefox (www.whitefox.com ), the clean fuel membrane specialist, announced today that it has signed an agreement with California based Pacific Ethanol, Inc. (PEIX) for the delivery of an industrial scale membrane system. The objective is to reduce the consumption of water, energy and emissions in the production of ethanol while increasing product output.
This project is fully aligned with California's push to cut water consumption and reduce emissions, which is affecting both Californian ethanol producers and companies wanting to export ethanol into California.
According to the agreement, Whitefox will deliver a stand-alone, container based, membrane system that will be deployed at Pacific Ethanol's Madera plant in California. The Whitefox system is scheduled for delivery this month with commissioning and start-up in June.
The membrane unit will be used to assess the impact of treating certain side streams in the ethanol production process and optimise the design of a membrane solution to remove bottlenecks and improve ethanol production efficiency at the Madera plant.
In a statement Whitefox's CEO Gillian Harrison said: "We are very excited about the opportunity to work with Pacific Ethanol. When I met CEO Neil Koehler last November, I was impressed by the company's efforts to lead the way in the production of low-carbon renewable fuels. It is clear that Pacific Ethanol is investing in energy and water consumption reduction initiatives because it makes environmental sense, but also because it makes good business sense as it improves plant efficiencies. We are confident that Whitefox's membrane solution will contribute to Pacific Ethanol's ambitious targets and look forward to working together."
Dr Stephan Blum, Whitefox CTO said in a statement: "Existing ethanol producers are dealing with a number of issues in the ethanol production process: One challenge is cooling water during hot and humid summer months when output capacity is sometimes reduced to maintain product specifications. Another challenge is the constant recycle of water-rich ethanol that consumes additional energy and prevents plants from operating at their full capacity potential. These challenges can be addressed with a membrane solution that give producers a more reliable and efficient operation".
Notes to Editors
About Whitefox:
Whitefox is a specialist engineering firm that delivers innovative membrane solutions for different solvent applications and chemical reactions. The company has over 10 years' industrial experience, focused on providing the most energy and water-efficient separation systems worldwide. Projects range from integrating chemical reactors and recycling waste ethanol in pharmaceutical plants to producing high-quality potable and biofuel grade ethanol.
Yes, this did initially confuse me, as I remember all the reports saying the EPA would release the final quotas by the "end of spring" so I thought this was different.
However, I dug deeper and realize this DOES include all of the ethanol blending as well. This was a court decision from a lawsuit from the oil industry against the EPA for failing to meet legal requirements and quota issues.
Therefore, this DOES include ethanol blending, and now they legally, 100%, without a doubt, no monkey-business or delaying HAVE to release the quotas BY November 30. Not to say it cannot be sooner, but that is the last date and includes ethanol.
That is a good question Dutch, I'm trying to figure out the answer to that myself, only reason I can somewhat comprehend at the moment is that future uncertainty about ethanol/the RFS/and blending requirements and this crazy corn ethanol mandate bill to eliminate RFS proposal nonsense (that will never pass but makes people think)
On a side note, anyone seeing the crush margin trend here? It is looking awesome, currently sitting at +.30 with corn at 3.71 and ethanol at 1.62. Been a while since it has been this high, and ethanol is still trending upwards with corn somewhat hovering around 3.70-3.80
Driving season ramping up with demand should only mean more and better, combined with the fact that corn oil separation at other 2 plants are essentially done and operational like NOW, and the merger going through for expanded production and marketing. Throw in the CO2 they are starting to sell now for another 1-2 cents a gallon, and DDG and WDG prices looking good, man!! Many people I believe (like myself for a while) seem to overlook all the extra co-products they have developed over the years for diversifying their revenue stream and focus solely on ethanol prices, but that is only a part of it now. I firmly believe the co-products are MAJORLY responsible for the last 2 earnings beats.
I am pretty excited right now with all these positive catalysts, and still have the last 100% ownership hanging around just waiting. I think it is just a matter of time before the ethanol futures and share price catch up, and hey, I've got nothing but time. I'm in no hurry and since im now above my break-even price ($11.25), I'm feeling good with the upwards trend. May not see the $23 we saw when I coulda sold (hindsight always 20/20) for a while before I sell, but I'm not even considering selling until at least $15-$16 then i'll starting thinking about it.
Ethanol price spiking a bit....
Up almost 6 cents already this morning to $1.50
EIA Report in...good news again!
http://ir.eia.gov/wpsr/overview.pdf
Cliff Notes:
Crude Oil Reserves INCREASED 0.8%
Gasoline Reserves DECREASED 1.9%
Ethanol Reserves DECREASED 1.7%
Third straight week of ethanol reserves decreasing.
EIA report in, good news...
http://ir.eia.gov/wpsr/overview.pdf
Cliff notes:
Reserves:
Oil INCREASED 0.4%
Gasoline DECREASED 0.1%
Ethanol DECREASED 1.6%
Good question, I know oil and the market as a whole is down, but i'm not sure why PEIX is down this much...especially after zacks.com upgraded it from a neutral 3, to a buy 2.
Here you go Rule...
I was able to find this about Valicor's VFRAC corn oil extraction system, which is being used at the Aventine Plants PEIX will acquire, I figure it is a good baseline, probably pretty close (the PEIX plants are using Edeniq INC's "Cellunator" system)
Call it about 1 pound per bushel of corn average?
Yes I expected some profit-taking/post-run hangover today, though at -$0.72 it is a little more than I would have thought, but I do expect the afternoon session to pare some of the losses and probably close around $11.45-$11.50 and follow with a good positive session/week starting Monday when all the crazy excitement/volume drops back down and people realize this is a great investment opportunity with a bright future.
BLOWOUT EARNING ARE IN!!
They destroyed the analysts estimates!
Consensus estimate of $0.12 to $0.15 EPS.
Reported for the three months ending December 31, 2014:
Net income of $12.2 million, or $0.50 per diluted share
Adjusted Net Earnings of $10.0 million, or $0.41 per share
Adjusted EBITDA of $16.3 million
Reported for the year ending December 31, 2014:
Net income of $20.0 million, or $0.88 per diluted share
Adjusted Net Earnings of $59.9 million, or $2.64 per share
Adjusted EBITDA of $95.0 million
Energy Report available...
http://ir.eia.gov/wpsr/overview.pdf
Cliff Notes:
Crude oil inventories INCREASED by 0.9%
Gasoline inventories INCREASED by 5.9%
Ethanol inventories DECREASED by 0.3%
I second this motion Dutch...motion PASSED!
Aventine Plant finished corn oil extraction system install
Always good to hear, getting those plants in top shape!
http://www.businesswire.com/news/home/20150225005215/en/Aventine-Renewable-Energy-Installs-2.4-Million-Corn-Oil#.VO87sJBOl7g
Lots of good news floating around here:
-EPA stated they will announce ethanol mandates for 2014, 2015, 2016 sometime this spring (they wouldn't clarify more, just said "spring ends June 21"). Numbers are expected to be higher than their original "proposed reduction" and based off of real world numbers including gasoline demand, previous production levels, blend wall, exports, and cellulosic considerations.
-Ethanol inventories DECLINED for the first time since DECEMBER, snapping 7 straight weeks of increases...boding well for the ethanol futures and spot markets, most likely starting to see the bottom of overproduction, market should stabilize driving the ethanol price back up to around $1.60-$1.70 in the near term with corn hovering around $3.50-$3.70 range.
-PEIX finally broke the $10 mark, which is a good mental/perspective hump to get over, now back in double digits. Good for us, good for the Aventine deal, bad for the shorts who might start getting nervous, especially with a high short interest % of share float (~18%).
-And it's FRIDAY!