They simply don't have the cash flow to pay out $44 mln anually anymore - actually they didn't have it the last few quarters either but payed nevertheless.
The only good thing is the low debt balance which prevents the company from near term bankruptcy risks but the remaining assets might be actually cash flow negative at current market conditions when adjusting for maintenance capex requirements.
Just like CLF recently the company will most likely be required to record a major asset impairment charge to reflect the lower value of the properties at current market conditions.
With the 15% distribution yield gone I don't see any reason for investors to stay with the units here. The coal business remains a complete mess and might stay depressed for many years to come. It will only take a few more quarters for some major US players to file for bankruptcy protection and this might still happen to Rhino if business conditions won't improve dramatically.
you must be joking - do you still think the assets can be sold at $14 per unit at current business conditions ? Actually a huge impairment charge might be justified here given the state of the coal market. And take a look at Boardwalk Pipeline earlier this year - and they just decided to redirect free cash flow to pay off debts while Rhino just has NO free cash flow to make those huge distributions anymore. BWP was down 50% the next day - now imagine what might happen to the Rhino units tomorrow.
Given today's announcement I would expect a huge impairment charge at year end just like CLF recently announced.
Actually the units need to trade at $4 to return some measly 5% annually going forward so there will be more downside tomorrow.
even if 800k people would be infected Versar won't profit here as they are not in this business.
This is outright dumb - the company reported nine month bookings:
for a total of $27.5 million in 2014 so far. I don't see any reason to get excited as the number for all fo 2014 will still be lower than already achieved in 2011.
you also own GPRE ? What about REGI ? That's what I call diversification...
GPRE won't buy back a single share at current conditions as the stock looks overvalued here - analysts estimates are toast.
yeah - you are for sure a huge brain. BIOF is now in the home building business and has nothing to do with ethanol anymore. And I am taking the bet that PEIX will end up below $9 given the carnage in the ethanol futures today. Added another 5k short for 50k shares now.
ethanol is down again today and this won't change anytime soon given the oversupply situation in the market and lower demand every single day. If things don't improve very quickly (which they won't) the company's position will weaken to 2012 levels. With the demand issue somewhat new to the market things could get really brutal.
why not shorting here - there's plenty of money on the table even with the stock down 70% from recent highs - given the market conditions in the ethanol market in the short to medium term coupled with poor management decisions it is hard to figure out much value in the equity. In Q4 the company will be burdened with full production costs but won't be able to sell even 30% of their output which might lead to a cash loss of more than $40 mln
anyway - the shares look so poor even in today's rather strong market I couldn't help and just added another 10k short. Now 45k short.
the downgrade might put additional pressure on the shares today but is nonsense as it is based on automated balance sheet screening which of course is outdated data.
I shouldn't need to respond to my own posts if I had another id - don't you think ?
by the way ethanol prices are once again in free fall today - clearly this has been a great year so far for me with dozens of great calls and giant gains but this one might be the most rewarding one. At my short term price target of $5 I would be able to realize a $350k gain before taxes. That's even better than the GTAT windfall profit last week. I was short but really didn't look for bankruptcy at that time.
or perhaps even days as I don't think anyone would want to hold the shares going into a conference call which will be the most painful ethanol investors might ever have listened to. PEIX investors might be hard boiled given the history of the company but they haven't seen nothing yet.
They were just lucky to enjoy great business conditions for a few quarters but again even in great times management's decisions look poor. They bought additional plant ownership at peak prices which will fire back badly in the next earnings report. With PEIX to experience brutal losses in Q4 they will now get 96% of them instead of 91%. They re-started poor yielding plants at elevated costs just before the market cratered to historic lows. They will have to idle several facilities again ASAP to remove overcapcity out of the market and to stop the bleeding.
It is really hard to find a bright spot looking at the short to medium future of the company. Perhaps they should outright sell their assets to a smarter company but at current conditions they won't get anything.
The shares remain one of the greatest short ideas in today's market and I fully expect them to move below $5 within weeks.
There is no need to cover here with the Q3 report and devastating comments about the current quarter due in about two weeks. Would fully expect the shares to move to $5 levels after the call.
we're done - looking for quick extension below $9.50 - if market turns red the shares will end up in the mid $8.s