Just be HAPPY if they sell half, and keep half!
Better do it before... not after...
Lower Interest rates, higher debt balance PLUS WARRANTS! ( dilute on the way up)
Can't believe pixie cannot wiggle its off high interest rates, in this environment. Industry is OK, Pixie will be OK when they get a financing package done. Do-able, but in past episodes, they sold the common shares down river by diluting, diluting. With the lowest ever interest rate environment, let,s see how they manage this round.
My buy now is jsut based on idustry trends. Potential to a strong buy if they show a clearer path to work down the debt.
the way they forward sell sugar for dollars is balanced by the dollar debt issued. So, they step away from ups and downs of dollar for the pre-sold sugar.
now, because sugar is sold 6,9,12,18 months in advance of delivery, the QUANTITY presold is important. when margin is low, like in past 2 years, they presold very little! When margins are higher, they decide how much more to sell.
in the current season, local currency is down(reals0, they had presold very little and sugar is getting pricier!
If LCFS credits were cashed-in ( ???), for the better at $120ish per credit.
If LCFS credits were not sold, or claimed (???), now LCFS unit is worth $80ish per unit.
So easy math : either a CASH bonanza if they did cash this in.
A Balance sheet LOSS ( $ : 120 to $80), of $4M or so. ( Just balance sheet loss converted into tax credits)...
I like 3Q better - positive margins even with low LCFS value
Good window for working down debt: sell in dollars, payback your bonds in Brazilian reals.
Meanwhile sugar has gone up and up!
In running any kind of plant production, think if the problem / kinks issue was at the end of the quarter.
Rather have it whereby the problem(s) were at the BEGINNING of the quarter, and by the end there was relief!
Now, is it as fast as it could have been? No... it is not.
Is it still a record pace? Yes --- it is!
Is it still behyond earlier expectations? Yes... it is
Then, we just have a case of bullishness meeting REALITY.
With the automotive market COMPLETELY heading to SUVs, large SUVs,
Fleet mix has increased gasoline demand for a long time, and with this imbedded demand for E10.
What the EPA has not down to keep the mandated ethanol volume at target level, SUV demand will dothe job for them.
RINs is one factor for ALL.
But for West coast producers, LCFS is another element of margin. OK, hvae noticed LCFS going from 124 three months ago to now 94?
Still higher than the 60-80 range of last year. But will LCFS level here or will keep going down?.
Not a good sign for PEIX if local LCFS credits are going down in value. Something to keep an eye on.
England has kept the gains from Trading and Investment Banking... EU had proposed for London to allow tax on these transactions depending on where they landed. England said no!. EU said GO!
My reading is that England will either be pushed out 100% . Just like banking in West cannot go to China to do an IPO of their company in China. Or England will have to pay FEES to EU...
Guess what ? England will have to fold. Period.
The sooner they come to a working arrangment, the sooner the issue of immegration will find a resiolution in EU contries.
Meanwhile buy US banks who know can win deals over the EU and ENgland Investment Banking banks.
Second, every unit of currency will be needed to restart the world economy. So buying dead , non-productive assets ( Gold an LAND, or digging for oil to leave it under the ground ...) will not pay current earnings. Productive assets ( generating EARNINGS) will be bought more and more. So more M&A in those segments. Less money under the mattress since bank is paying negative interest. Less INFLATION : no need to drive up Gold pile.
This may take another 10 years for BRexit Smooth Sailing!
(Canada took 7 years in calm waters! )
England needs to produce REVENUES
to SHARE WITH EU countries ( via TAX on transactions).
They cannot afford to stash their currency in NON-PRODUCING ASSETS ( like GOLD).
Wake up and see that the WORLD cannot longer HIDE or expect to DO NOTHING to get paid with interest rates, or appreciation of non-producing assets.
If you have oil under-ground, pump it and sell it! Otherwise Technology will eat your non-production with sun, wind.
If you have money, work it! No more 'INCOME from interest rates' for doping nothing. Or else, eat up slowly.
If you have CURRENCY, place it in production or else watch it go down!
If you have NON-PRODUCING ASSETS( like Gold), move out of it or back into the Ground until next 'panic'
Sentiment: Strong Sell
Gold is just a heavy metal with negative rates in this environment.
So what if England has to share the spoil of invetment banking with other EU contries!
Greedy is what what about the SCHEDULING of the Referendum vote as a NEGOTIATION position. then some FOOL uses xenophobic reasons to win the vote!
THEN they had no plan, and NO LEGS to negotiate!
LOOSERS are loosing their PANTS.
Sell non-producing assets, buy PRODUCING ASSETS.
Gold is just a negative return on cash !
Andersen, a common adjustment when you folks do the calc...
o use cash price on both sides ( corn and ethanol)... Not cash rpice on one side and next month future price on the other side of the equation
o if you are projecting next quarter trends, then use future prices on both sides as a quide( not absolute sinceeach company chooses to be in, out or tiing of contracting futures).
o When using ' cash corn price', remember basis is local to where buyer is... big difference between LOCAL cash price and on avg quoted future price ( next month price)
Good for PEIX who has the highest corn basis of all the ethanol company... due being out west versus mid-west/cornbelt. So this is a key variable for them. Good when corn prices are headed down or low with transportation cost stable.
Corn aplenty due to 94+mil acres planted and 2Q stock(in bins) higher than forecast.
Happy summer driving!
2Q Margins positive better than Q1.
DDG much higher
Inventory much better
Can they get a refinance package (lower rates) to put cherry on the cake?
K needed for refinance package.
To Keep refinance COST out of current quarter, only report deal early in next quarter, although already negotiated.
Try to record Refinance cost when margins and volume are best as to absorb cost.
Financing Management 101
( not every 8K is prep for refinance package, but every refinance package requires official numbers)
FMV at option grant date is used to estabkish Capital Gains or Loss when and if the opion is excersized.
So on Day 1 of grant FMV is $10. If N years later you actually get the stock ( become vested) and the day you sell it at vakue Y, then your gain or loss is based on $10.
In the case of Merger, you get Vested due an event. . Gain or Loss is based on the FMV when option was granted.
Cas received h is still based on current market price at time of SELLING ... ( not at time of event trigerring Vesting))
Yeap, interest rates are to stay low for a long time. The window for PEIX to write bonds and to restructure its debt ( from Buying Aventine) will stay open wider and longer. The RATES to be paid by PEIX will look SWEEEET to the banks vs alternatives.
See article on Vietnam buying DDG to ffed the Hogs to be bought by China!
The other isde of the coin, export is taking ethanol fuel away in volume.
Corn oil used for buifuel mix
Industry running on all cylinders