Fri, Nov 28, 2014, 2:26 PM EST - U.S. Markets closed early today

Recent

% | $
Quotes you view appear here for quick access.

Pacific Ethanol, Inc. (PEIX) Message Board

  • misskellyfitz misskellyfitz Jun 16, 2013 1:14 AM Flag

    "If Midwest ethanol producers believe they are disadvantaged by the California low carbon standard, it stands to reason there must be others that will benefit."

    Winners
    PEIX,AMTX

    potential beneficiary of California’s attempt to strain out the carbon content of transportation fuels used in the state. The post “Sorghum Power Ball” on December 4, 2012 followed sorghum’s designation by the U.S. Environmental Protection Agency as an advanced fuel. Pacific Ethanol (PEIX: OTC/BB) had recently announced that California-grown sorghum provided 30% of the feedstock used in its ethanol production in third quarter 2012.

    At the end of 2012 California-based Aemetis, Inc. (AMTX: OTC/BB) announced its intentions to transition from corn feedstock to sorghum at its Keyes, California ethanol plant.

    Both companies could benefit if CARB prevails in legal battle over its low carbon fuel standard. What is more both are accessible to investors in the public secondary market. Now that we have established there is wind at the backs of these companies that could drive revenue and profits, let see how much it will cost.

    Pacific Ethanol shares have a beta measure near 3.90, indicated a long position in PEIX would be a cheap, but exciting roller coaster ride. This puts a bit of pressure on an investor to pinpoint enterprise value. In 2012, the company lost $20.8 million on $848.8 million in total sales. Indeed, Pacific Ethanol only produced an operating profit in the year 2011 when sales topped $900 million. Sales in the first quarter 2013 recovered and if that pace is maintained the company could deliver another $900 million in total sales for the year 2013. Unfortunately, it looks like management has become a big spender as operating expenses were significantly higher in the quarter, putting into doubt a profit even on $900 million in sales. PEIX shares are trading at 0.20 times assets, most of which are tied up in the ethanol-making plant and equipment. These plants have been proven to have value even in bankruptcy and we think this stock might be undervalued in terms of asset value.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • The Battle for California’s Ethanol Market

      by Debra Fiakas CFA

      For all the fuss, investors might think California’s ethanol market is another Gold Rush. The Midwest-based ethanol producers are up in arms over California’s attempt to set standards for renewable fuels sold in the state.

      California ethanol market is the largest in the U.S. and represents the majority of sales by Midwest-based ethanol producers

      • 1 Reply to misskellyfitz
      • Winners
        PEIX,AMTX

        "If Midwest ethanol producers believe they are disadvantaged by the California low carbon standard,
        it stands to reason there must be others that will benefit."

        The Battle for California’s Ethanol Market

        by Debra Fiakas CFA

        For all the fuss, investors might think California’s ethanol market is another Gold Rush. The Midwest-based ethanol producers are up in arms over California’s attempt to set standards for renewable fuels sold in the state.

        California ethanol market is the largest in the U.S. and represents the majority of sales by Midwest-based ethanol producers
        potential beneficiary of California’s attempt to strain out the carbon content of transportation fuels used in the state. The post “Sorghum Power Ball” on December 4, 2012 followed sorghum’s designation by the U.S. Environmental Protection Agency as an advanced fuel. Pacific Ethanol (PEIX: OTC/BB) had recently announced that California-grown sorghum provided 30% of the feedstock used in its ethanol production in third quarter 2012.

        At the end of 2012 California-based Aemetis, Inc. (AMTX: OTC/BB) announced its intentions to transition from corn feedstock to sorghum at its Keyes, California ethanol plant.

        Both companies could benefit if CARB prevails in legal battle over its low carbon fuel standard. What is more both are accessible to investors in the public secondary market. Now that we have established there is wind at the backs of these companies that could drive revenue and profits, let see how much it will cost.

        Pacific Ethanol shares have a beta measure near 3.90, indicated a long position in PEIX would be a cheap, but exciting roller coaster ride. This puts a bit of pressure on an investor to pinpoint enterprise value. In 2012, the company lost $20.8 million on $848.8 million in total sales. Indeed, Pacific Ethanol only produced an operating profit in the year 2011 when sales topped $900 million. Sales in the first quarter 2013 recovered and if that pace is maintained the company could deliver another $900 million in total sales for the year 2013. Unfortunately, it looks like management has become a big spender as operating expenses were significantly higher in the quarter, putting into doubt a profit even on $900 million in sales. PEIX shares are trading at 0.20 times assets, most of which are tied up in the ethanol-making plant and equipment. These plants have been proven to have value even in bankruptcy and we think this stock might be undervalued in terms of asset value.

 
PEIX
11.63-1.74(-13.01%)Nov 28 1:00 PMEST

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.