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Monday, 06/13/2022 11:47:06 PM

Monday, June 13, 2022 11:47:06 PM

Post# of 519

Insider Financial

by Jim Bloom


RiceBran Technologies is another NASDAQ stock on our list, although it is not related to the energy sector. The $40 million company has had a great year so far, maintaining the bullish trend that took off in January. RIBT has gained 40% over the month and has doubled in price since the beginning of the year. The stock is now trading at $0.77. On Wednesday, it peaked at $0.90, which is the highest since September.

RIBT operates as a specialty ingredient company. It focuses on producing, processing, and marketing of value-added healthy, natural, and nutrient-dense products derived from rice and other small grains. The company converts raw rice bran into stabilized rice bran (SRB) and high-value derivative products, including:

RiBalance – a complete rice bran nutritional package derived from further processing of SRB;

RiSolubles, a nutritious carbohydrate and lipid-rich fraction of RiBalance;

RiFiber, a protein and fiber-rich insoluble derivative of RiBalance;

ProRyza products, which include derivatives composed of protein and protein/fiber blends.

The company’s SRB products are also marketed as feed ingredients in the animal nutrition markets. It serves food and animal nutrition manufacturers, wholesalers, and retailers in the US and internationally.

RIBT has benefited from surging food prices, especially after the Russia-Ukraine conflict caused serious concerns about the wheat shortage that could push prices higher. Nevertheless, it’s not only about wheat – there is a food shortage worldwide, and many regions are preparing to face famine.

RIBT is in a position to benefit from the increasing demand for foods, including rice. On top of that, the company is leveraging the companion animal market.

At the beginning of the month, RIBT said that it would start expanding its Core-SRB facility in Mermentau, Louisiana. The expansion is expected to increase the capacity of the facility’s SRB stabilizing capabilities, enabling RiceBran to meet the growing demand for North American-sourced ingredients for the companion animal market. The project, which will be completed in Q3, will add a fifth extruder to the RiceBran’s Mermentau, Louisiana facility.

The move comes about two weeks after the company announced the start of a significant capacity expansion of its MGI Grain Incorporated (MGI) facility in East Grand Forks, Minnesota. The expansion is expected to double the capacity of the pearling mill, enabling RiceBran to meet growing demand for North American-sourced, grain-based ingredients and with a minimal capital investment and a limited increase in labor.

We like that RIBT is expanding its production capacity, with the company benefiting from higher food prices as well. In April, it reported a revenue of $10.6 million in the first quarter, up 23% year-on-year and 31% q/q. The increase was driven by higher core-SRB sales and strong growth for MGI and Golden Ridge. Improved results for MGI and Golden Ridge supported a return to gross profits from gross losses in 4Q21, although gross profits of $502,000 in 1Q22 were off from $672,000 a year ago due to lower Value-Add SRB derivative sales.

While RIBT might be overbought, we think it has solid fundamentals and is a good penny stock to hold in the long term.