took a few more days but finally the stock is near my price target. Covering here. Another good call and another giant gain.
finally below $8 - slow progress but things are clearly working out here
Revenues are growing but margins came down even further when normalizing for inventory write-offs. Management promised margins to move up next quarter as well as revenues to come in in-line with expectations but this most likely still won't be enough to reach break-even results. The company's cash needs for working capital inceases continue to be extraordinarily high and this won't stop in 2015 as management pointed out.
Even worse managment did not commit to ongoing sequential revenue growth in 2015 so there won't be any chance for profitability this year.
With poor margins, high cash consumption and no viable path to profitability the shares remain a sell here.
worth $4 mln in additional liabilities EACH year. Stock should reach new lows despite some positive revenue developments. Shorted 30k around $3.20
adding to short position here - would expect this to finally move closer to my $7.50 target today
The price looks pretty expensive given the current business conditions. PEIX is paying more than $1 per gallon of capacity.
The deal unnecessarily exposes the company to business risks it was shielded from so far.
Aventine's plants are outdated and require immediate and huge capex commitments
The balance sheet gets killed again by $135 mln in debt.
The share price gets killed by almost 18 million new shares which will ALL hit the market soon or already started hitting it despite the deal has not closed yet.
The deal is margin dilutive due to outdated plants and competition in the mid-west
Size doesn't really matter here as the deal does not have much synergies but rather exposes PEIX to huge risks. Sell.
Very disappointing that they only managed to participate in year end budget flushes by discounting their products heavily
Despite revenues coming almost 20% above analyst expectations gross margins will be actually BELOW the guided range of low to mid 60s. Selling discounted products at a loss does not seem to be a viable business model going forward at least not to me.
Would expect the shares to give back ALL of the gains as the increased revenues for Q4 were achieved solely to DEEP discounting of already low margin products as evidenced in a whopping 10% drop in gross margins from Q3.
This is just plain dumb. While the merger clearly looks like an expensive, ill-timed and ill-fated deal even PEIX management will have done something close to a due diligence before buying Aventine. So at least PEIX and their consultants had full insights into Aventine's books. By the way it doesn't take much to go through the books of a simple business like ethanol production.
They have 6 people employed two blocks from Supercom. There's zero reference to the company on the Internet apart from their own website
The corn price is up 30% from September so clearly margins are getting absolutely killed here for ethanol producers. PEIX is experiencing even more selling pressure because of their expensive ill-timed and ill-fated acquisition of mid-west ethanol producer Aventine.
there's no way they would have been able to eliminate that much debt from their cash flows within two years but the Valero deal might have contributed to the debt decline.
$50 mln in CLAIMED contracts actually - I still believe the company is a fraud and today's news forther reinforces my view. This is most likely a buddy deal as the company is located almost next to Supercom in Herzliya. And of course the purchase price does say a LOT about the revenues.
With the aggregate purchase price not to exceed $2.5 mln current annual revenues of the company will be somewhere between $0 and $500k at the very best. Given these numbers the company simply CAN'T be profitable or we must assume that their people work for free and there are no other costs associated with doing the business (which business by the way - there's zero reference to the company in the whole internet).
Anyway even if the company does miraculously earn a profit how can this be "very accretive" to the earnings of a company the size of Supercom ?
Things don't add up here once again.