Alto Ingredients Inc (ALTO)

[danke]

My thought is the "market" is giving partial credit to PEIX for third quarter results as they should be a done deal and exceptional. Market is also lookinng forward towards fourth quarter and beyond. Currently with todays margins these results will go done significantly. Thus, the sell off which may have started just because PEIX was overbought, added fuel to the fire when the margins backed off.

Markets look forward. Using today's current margin environment that have corrected down heavily past three weeks to end third quarter and extending today's marging to the fourth quarter provides about 2/3 of the processing margin per gallon the company has experienced the past twelve months. So today, they are probably looking at breakeven.

Thus, if PEIX is to move up to any degree in the next six months, this margin compression needs to be an overreaction created by traders and a short term situation that will correct itself back at least half of what was lost. The last thing shareholder need is for poor margins that reduce cash flow that cause Neil to decide to go back to the printing press to print stock certificates to pay bills.

Processing Margins are the key.