Imports are running high. http://www.thegazette.com/subject/news/business/agriculture/big-soy-crop-no-help-for-biofuel-makers-overrun-by-imports-20160702
After the BTC lapsed, imports fell 35%. The BTC will do so again at EOY and with high probability it will be reinstated as producers tax credit, imports can be reasonably expected to fall significantly. The conventional wisdom is the markets anticipate events six months out. 2017 is in play.
In my calculations I tend to exclude shares shorted by hedgies holding convertible securities. The conversion provision is tantaumont their already being bought, these hedgies stripped the interest feature from the conversion and will be holding only for the interest. Regretfully, the market has needed to find additional longs willing to hold these additional shares which has a negative effect on sp.
And if it is short covering, sobeit. Shorts cover for a reason and they are reducing supply by their covering.
On the other hand, I could be unnecessarily negative. Biodiesel is the only fuel that is green friendly and LCFS has been great for biod in Europe and CA. Can't help but notice REGI sp is acting better today than it a has in some time. Could Mr. Market be paying attention to a new factor?
Please bulgar. Go to South Coast's website page celebrating their innovation and be treated to a picture of an egg being broken and plopped into a blow of beached floor. LMAO at your claim of Trivia's (sp) egg substitute being 10% of all South Coast cookies.
gras2 has your number. Read his comments.
Today's WSJ has a lead article on XOM's support for a revenue neutral LCFS standard. Some how just don't think this will be good for biodiesel, but have yet to pfr due diligence. This is a possible factor in the sp's malaise. Also can't help but notice, the CA LCFS credits have been selling off, from the 120's few months ago to the 90's inferring is being meet.
Mkt is acting like the last block for sale, 320k, traded into the close yesterday. If that is what has been holding down sp, should be seeing move toward top of range. Now if those margins being reported in CARD apply to REGI could be interesting. Guidance midpoint would be for about $ 0.12/gallon profit margin.
I hear that.
But the question is also, is this the REGI of 2015 or of 2013? is this the Geismar of 2015 or 2017? Seems the company's recent sp purchases are saying "the later." And if they are right?
As reported by CARD, operating margins on soy biod are running 50% higher since REGI's conf call. Could this mean a big profit surprise? Would think so, but this is REGI where hedging to avoid loses can create them. For example, going long BO which fails to rise and offset the rise in grease and waste oils that the company uses. Hope I'm wrong and that REGI will be in position to announce guidance surprise after the 1st. An increase in SME margins from the 0.40's to the 0.70's ought to mean something good is happening out there.
Saw another block of .5 m shares go across. Have to think this is continuation effect of the convert issuance. And wonder whether this is the end of the selling.
Interesting question, which means I don't have an answer. But curious whether they can go beyond info released to public on theory it being a "meeting" it is public? Now if they webcast it, then they would not be limited. Go figure.
Could be just down on residual selling be hedgies stripping the interest payment from the stock, i.e. sell short to remove the stock conversion component and hold on to the right to the 4% payment for the next twenty years.
To me the company has great potential going forward. We could be merely in the back wash from last years Geismar headache. That could have cost a buck or more a share in an otherwise horrible year what with crude crashing. But Geismar also depressed share price and accountants decided market cap could not support that $175 million on goodwill on the balance sheet. So they wrote it off. Now when a new investor begins dd he sees that big fat loss of $3.35/sh last year and goes "woah" cowboy.
But going forward things look great. And by, the way, the company does not sell fuel. It does sell compliance with environment regs. Need to get that straight, shooter.
Hmmm, likely to a a biochem plant. This round of financing clears the way to commit funds to the bacteria plant that has been on the stove for over a year. Should be just about cooked to perfection by now.
Do tend to dismiss manipulation. It is just too tempting. Always there to explain away any downside action and it stands in the way of looking deeper for real causes.
There is a disconnect between my thinking, should have broken into double digits, and the market action, breaking deeper into singles. Have too much respect for markets to ignore price action.
Sp is in a funk and can't get a grasp as to the why of it. Aside from the usual fears, can only guess. One would be that the cost of REGI's grease feed stocks are high in relation to bean oil. This could be due to demand pull arising from LCFS, or aftermath of El Nino. But what ever the source, the idea would be that BO plants would have the edge here. However, if this were the problem there is a answer, the BO operating margin would be a floor for REGI, that is REGI would switch to BO (or threaten their grease suppliers with such a switch) to maintain that margin. So it not that big a deal. Now the counter point becomes, is this all just a scapegoat a pumper has imagine to explain away a fall in REGI's sp? And the real reason for the share price malaise is . . .
Criticism would be only helpful.
The counter point would run, XOM benfits in several ways. First, it's PR people have an additional talking point demonstrating how SOM supports AE. Second, there is the possibility (no matter how remote) the JV might be successful, one never knows what might be discovery, break through made and XOM is a huge company that cannot afford to make the IBM mistake. Third, while XOM may not impact eviro groups that is not necessarily their target audience, they may move some undecided and that is good enough in a long campaign.
Please it wasn't me. You remember don't you, that it was the short, willy or beeny or something, who argued REGI was selling their stock short (the convert's at 10+) and buying it back cheap (8 +) which was just like covering. Claimed foul play.
Does REGI have anything to be concerned about in the court papers?
REGI picked up 4 million shares a $8.32 the other day. To use another posters analogy, they "covered their short."
Eh, a nickle here, a dime there, it all adds up. Now for the 2Q results and the 3Q guidance.