Replies to post #29618 on Alto Ingredients Inc (ALTO)

[Harry Winston]

You can "hope" for the best, but you would be wise to prepare for the worst.

I have already prepared for the worst. If the PEIX stock price goes down low enough, an open order will buy some more shares for my account.

A Zack's article dated February 20th mentions their Q4 numbers, yet to be reported by the company, but the article doesn't mention the litigation with Greenshift.


These are the first three paragraphs of that article.

The market expects Pacific Ethanol to deliver a year-over-year increase in earnings on lower revenues when it reports results for the quarter ended December 2018. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

These are the last three paragraphs. They're in a section titled "Bottom Line".

An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Pacific Ethanol doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Again, there's no mention of litigation anywhere in this article.

Please keep in mind that whatever you think of the outcome of the litigation, and whatever outcome you and I want from this litigation, the Appeals Court hasn't taken any direct action on any of the important issues. You and I and many other people on both sides of this litigation are still waiting for some substantive news, as we've been doing for years. While we all wait for that outcome, the business of producing ethanol and the business of producing other products, including plastic, from the waste parts of the corn plant, continue.

[Harry Winston]

This article was published today. It names Pacific Ethanol in their list of the 14 largest ethanol-producing companies.

These are the last two paragraphs of this report.

We believe that approximately 90% of the ethanol produced in the United States is made in the Midwest from corn. According to the Department of Energy, or DOE, ethanol is generally blended at a rate of 10% by volume, but is also blended at a rate of up to 85% by volume for vehicles designed to operate on 85% ethanol. The EPA has increased the allowable blend of ethanol in gasoline from 10% by volume to 15% by volume for model year 2001 and newer automobiles, pending final approvals by certain state regulatory authorities. Some retailers have begun blending at higher rates in states that have approved higher blend rates.

According to the DOE, total annual gasoline consumption in the United States is approximately 140 billion gallons and total annual ethanol consumption represented approximately 10% of this amount in 2014. The domestic ethanol industry has substantially reached this 10% blend ratio, and we believe the industry has significant potential for growth as the industry migrates to an up to 15% blend ratio, which would translate into an annual demand of up to 20 billion gallons of ethanol.

"... we believe the industry has significant potential for growth ...."