Alto Ingredients Inc (ALTO)

[danke]

How ironic for PEIX and other ethanol processors to take a hit today. USDA released their weekly gross crush margin of 4.28 per bushel or $1.60 per gallon This is the fifth highest weekly number in the previous 406 weeks. The four higher weekly crush numbers were in 2014 the last two weeks of March and first two weeks of April. During this period PEIX traded in a range of $13.81 to $19.00 per share. During this 7+ year period the average is about 83 cents. These are the USDA numbers from Nebraska report. There are several states they post and I use Nebraska because this is this report uses wet distiller grain price. I realize the West coast sales numbers are different than the Midwest. Just use them for a benchmark and trend.

Today's 13 percent stock loss looks to be somewhat of an over reaction. It looks as though the market is assuming ethanol price will follow oil price collapse. Every time I make an assumption I am wrong 99 percent of the time. I would like to see the market be wrong on this assumption too.

As long as corn price is in a downtrend too gross margin from processors will stay over $1.00 gallon. If this type of margin holds long term, PEIX is undervalued.

Will get a better read on if the processors margins can hold next week. Today was a bit of a blind side from traders.