PEIX: The one-analyst earnings estimate I see on Scottrade and Ameritrade is $3.30/share. Do I expect a "miss"? I have no way of knowing, but look at GPRE who beat their earnings estimate today by about 35%, they are up less than 4%. I don't know whether the PEIX analyst who estimated $3.30 accounted for the charge required for warrants. Somehow I rather doubt it.
Ethanol stocks are NOT typical stocks, so we should not expect the price to rocket higher on a single quarter's result. The earnings potential of commodity stocks change daily with the costs of producing the commodities (ethanol) and cost drivers (corn, shipping, natural gas). Earnings estimates for future quarters are less than the $3.30 estimate, and you certainly cannot come up with a narrow range for a forward P/E estimate.
Some here were throwing targets around recently like $30 to $40/share after PEIX reported blowout earnings. I just don't see it happening. The price of ethanol has fallen, the price of corn has risen, and expectations have come down considerably at this point.
If PEIX does report great earnings today after the close, there will be lots of traders ready to take their profits in afterhours and tomorrow morning. However, in terms of risk vs. reward, what happens if PEIX only earned $2.00/share. Even with a well-worded release that explains the negative effect of warrants to net earnings, the market will be looking ahead to a quarter that will see profits less than the most recent quarter. I still don't like the fact that they will not have their conference call til tomorrow at 11am eastern time, meaning there will probably be a few hours of trading with significant "uncertainty".
Sorry to blab so much about it. I am long, by the way, and I'm still not sure if I'll sell some before the close today. However, I won't be buying any.
Focus Focus Focus Focus !!!!
