Alto Ingredients Inc (ALTO)

[value1008]

REX-- A slightly more elaborated post on REX, showing some added details, among other things, their crush margin on ethanol and corn. This is great news for the entire smallplay ethanol sector:

REX should be a 60-70% gainer in next few weeks and should well more than double by next earnings report in early Sept. for their May-June-July qtr.

CEO Stuart Rose has really "under-promised and over-delivered." Last earnings call he thrice promised analysts that REX would only do "slightly better" for Q1 than Q4's EPS of 1.95.

But they posted EPS of 2.66 for Q1, far beyond my estimate of 2.05, and over 6x more EPS than last year's comp qtr EPS of 0.43.

They added $20.5M in cash, far beyond my earlier estimate of $15-$16.
Reduced debt by another $8M.
At this rate, in 20 months they should have at least $270M in cash/equivs and ZERO debt-- presently at $120M in cash/equivs and just around $55M in debt.

They averaged over $9 in natgas costs, way above normal, because of the severe price spike in Feb., and yet it hardly hit their profit margin because of the crush spread (they sold ethanol at avg $2.14 and their industry-low price of corn was only $4.36/bushel avg) (one bushel yields 2.8 gallons of ethanol).

Think what this co. can do for Q2 with natgas prices at normal levels!

This is just tremendous. They should do well over 10.00 or 11.00 in EPS this year, well beyond my earlier projection of "nearly 9.00." Put a P/E of just 16-20 on that and you have a $160-$220 stock (REX closed yesterday at 62.47 and is trading premarket in $64-65s as I type)