Replies to post #14847 on Value Microcaps Junior Energy

[wadegarret]

a1derfullife- PEIX

The company made $.54 for the Dec qtr when Ethanol was $1.86, and corn was $4.50. They expect much higher production volumes with the opening of their 5th plant coming on line in April. The futures you refer to have Ethanol at $1.85 a year out ! I think PEIX would make $.75+/qtr all year even if Ethanol prices went down tomorrow to year out future prices ! That's $3 EPS/year. Why should we be careful with the stock at $15.60 ?

[value1008]

Actual price of ethanol may still be subject to railcar pressures and by that point foreign export demand for USA ethanol may be greater if China ups their demand. Also, PEIX gets a premium to those midwest ethanol prices. Finally, PEIX will have greater ownership of plants (up from 91% to 100%), and greater production by 25% higher with reopening of Madera. Granted, they'll also have greater share dilution from exercised warrants and at some point taxation becomes an issue.