I had grabbed that stat from commentary on either a GPRE annual report or a conference call script a few quarters ago. Things have changed a bit since then as GPRE has a higher number of shares outstanding, but then again, their production output has increased significantly because of the BIOF plants they purchased and frankly just about wipes the increase in shares.
The principal equation is the same.
Unfortunately GPRE hedged themselves out of some greater profits this Q, but it was a good Q nonetheless. Just less than "analysts expectations". Whatever that means. Expectations are relative.
Forward P/E still solid, current margin environment still solid and expected to stay solid. Price target of $50 very real. Will just take time the get there. Patience.
Q3 will be better.
Not this Q. Your logic should apply more appropriately to Q3. They hedged themselves to profits less than the street was expecting. Would be good to hear the CC and what other factors affected their bottom line.
Elahens believes WDG costs. Possible.
Generally ethanol companies operating more in the cash environment should bode better ... for now.
Buy the dips. Ethanol production fundamentals are very good and show no signs of changing. Todd Becker and management team are solid all around.
Good luck all traders and longs
GPRE could earn net profits of around $100,000,000 during the present quarter if the price of ethanol remains around $2.10 and they can buy corn for an average price of $3.50. They are bidding as low as $3.14 at their Otter Tail plant. That would be $2.70 per share in one quarter. If they were able to purchase corn at $4.50 per bushel and sell ethanol at $2.10 during the quarter they are going to report this afternoon, they could have earned somewhere in the neighborhood of $60 million net profit, which would be $1.61 per share for the quarter. The average estimate is $.96 per share. If they were to beat by $.65 cents, what do you think the stock would do?
solid performance. Ethanol is going to serve many needs in the months/years to come as the world experiments with freedom, chaos, and and more freedom.
Many hard days ahead, and ethanol/alternate fuels will be there to help in a big way.
Where have corn prices gone since the end of Q1? As importantly (or more so for the direction of the stock price) where have they gone since the end of Q2?
Let's not forget:
"According to page 36 of the report every 10% decrease in corn price leads to an increase in net income of nearly $84 million. With only 30.12 million shares outstanding, this is a pretty significant boost to earnings."
We've had a 27% decrease in corn prices from $4.70 to $3.70.
Good luck all traders and longs
Sentiment: Strong Buy
Diversified yes, but simple process.
You put corn in and you get 3 products out (ethanol, DDG or WDG and corn oil).
If you do not want to recognize that all products can be sold on a future curve, or the Futures market is not BIG enough for high volume of ethanol gallons can be pre-sold,
then be it.
DDG came down more than 50%. Producers may have to store their DDG to sell later. If this is the case in 3Q, they will incurr cost but not 100% of revenue on DDG produced during the quarter. So some producers will see cost and increased inventory with reduced margins.
Keep looking at crush spread only. Positive margins is still up.
But does bottom line needs to reset/re-forecasted, specially very little presell of DG can be executed. Thus the purchase of 'cow feeding' operations by GPRE. Others (like VLO, ANDE, REX..) may have farmer cooperatives to take on what they can consume. However DDG volume being shipped to China was a large percentage of production. The challenge is what it is. Lower price is a by-product of supply/demand.
As fuel export drives ethanol production, DDG byproduct supply is in surplus mode.
Buy the total backet, but do not ignore the pieces.
I'm worried about the current state of the general market. Every day it feels like we are on pins and needles and if she implodes GPRE will suffer....
IMO just a matter of how much it will go up on earnings release day. Clearly they are getting nice margins and that's not ending with corn well below $4 and very weak. Wouldn't surprise me if adm or some large company buys them out. Too many reasons to buy the company. My guess is after earnings all the analysts will be dramatically raising yearly guidance etc. Stock could easily double yet this year. Have a nice day.
GPRE's diversified (and expanding) revenue stream will absorb any price fluctuations in DDG. Period.
How? Hint ... What percentage of GPRE's total income is DDG sales vs. ethanol sales? Do the math, calculate the net added revenue from multi-year low corn basis ethanol margins (remember they're a commodities brokerage too) and net added production over the past quarter (BIOF plants) to what result? A $45+ price target based on a fair P/E ratio.
Go take your scare tactics to another board ... loser.
They don't work here.
GPRE will outshine your fuzzy math any time
Too funny, "still positive"? How bout objectively speaking- still VERY strongly positive! Come back to the peix board, we miss you! And your constant changing of your mind from short to long......didnt you go to strong sell of peix at 14? Good call! Lol
DDG price correction went from140% PREMIUM to Corn to a DISCOUNT now.
Downturn is now well documented as of mid-2Q.
Pre-selling for 3Q,4Q of futures for DDG is limited ( not to say unavailalble).
1) How much of 2Q earnings was impacted?
2) Which Company will be the first to RESET total margin expectations?
3) With corn so low and China stocks and supply positions, will DDG imports be resumed or wlll they switch to base corn as feedstock?
One way to lower Corn stockpile: you can use it(commercial use), you can burn it(ethanol), you can eat it( feedstock). Will the high stock in China be moved more and ore to feedstock?
Ethanol Industry Margins / Earnings still positive, but impacted by lower by-product returns!
I don't know what the earnings will be but I'm guessing they will be strong. It's fantastic it keeps drifting higher before earnings later this month. I think the potential cash flow they can produce will rocket the shares much higher. It wouldn't surprise me if it goes up double digits on earnings day. Corn keeps going down and oil stays up and the margins are only getting better. I've still got all my 25 and 30 Calls and will not be selling anytime soon. Have a nice day.
Nice job on the calls.
Corn continues to decline as expected. Ethanol stable and in a good sweet spot of being cheap enough to be competitive as an export and attractive domestic discount to gasoline, and expensive enough to make keep margins healthy.
Fundamentals are very good. July 28/29 should prove interesting. Guessing Q2EPS $1.18/share
Good luck all traders and longs.
Sentiment: Strong Buy