There may be some profit taking tomorrow before earnings. Some investors bought at $12 after the last sell-off and they could sell at $18.50 without any risk of a bad earnings report. $6.50/share gain on a $12 stock is a really great return over the last 2 months - so I can't blame them for taking profits.
They are just talking risk off the table. The smart money got into PEIX when the stock tanked after the last earnings report. So they could have bought at $12 and are taking profit as the stock is $18 pre-earnings. Or they could be selling their stock to take profit and they could be buying the calls. Selling-off pre-earnings (especially after a good run-up over the last 2 months) is not surprising.
Can you please give the board a few reasons why you believe PEIX is a pig and why you believe it will go down.
The longs believe it will go up for the following reasons:
1) A record corn crop resulting in very low corn prices.
2) High ethanol prices is creating incredible margins.
3) Cheap raw materials (like bulk sugar) are being used.
4) $1.54 per share EBITDA in Q1.
5) Pay-Down of $20,000,000 of debt in Q1 alone (this means the company is making lots of CASH $$$).
6) Opening of the Madera plant increases production by 25%.
Now please list your reasons why you believe PEIX is a pig that will go down.
It's Official: Q2 Earnings Release after hours on Wednesday. Place your bets!
Forget the message board pumpers and bashers...the market thinks PEIX is going through the roof after earnings and they are putting their money where their mouth is (unlike BJ and Ray). The August 16th Call Option volume is through the roof.
Sell-Off in the morning and buying in the afternoon? Very interesting. Usually, it's buying in the morning and selling in the afternoon...
PEIX won't go above $19 before earnings...we're going to be trading in a $18-$18.90 pattern until earnings are released. A great earnings report is the only catalyst that can send PEIX above $20...without great earnings, we're back to the $13-$14 range.
The shorts are starting to feel PAIN. The recent spike to $18.83 (a new 52 week high) looks a lot like the beginning of a short squeeze.
SHORTS - Either cover now, or wait until after Q2 earnings and pay more to cover. The choice is yours.
Please refer to the GPRE run from $15 to $37 for reference.
Can BJ or Ray even compose a complete sentence? I am willing to listen to both sides of any position. However, I cannot make one bit of sense of any of their positions. There needs to be logical reasons for going long or shorting a stock...and right now, the bashers seem to have no logical reasons to be short. The reasons to be long are obvious:
1) $1.54 EBITDA in Q1.
2) Paid-Down $20 Million in Debt in Q1 alone. (This means they are generating tons of CASH).
3) Madera is now open and plants are running at 100%.
4) Cheap raw materials and high ethanol prices.
5) Still have room for upgrades when they announce 100% ownership of the plants.
6) Strategic location to West Coast market (most ethanol plants are in the mid-west).
Ray - On earnings day I'll either be further up, or I'll buy more cheap shares (like I did on the last sell-off). Either way, I am prepared for what comes my way. However, I'm not sure you can say the same thing about those 16% shorts.
The warrants were not a hedge. They issues the warrants as a incentive for investors to buy shares so they could raise capital during the drought to keep the company a-float. This is the same reason they did the death-spiral financing. PEIX went through some hard times because of the drought and high corn prices and they needed to raise capital anyway they could - which usually means very unfavorable loan terms and dilutions. But the good news is: It looks like they are STARTING to turn the corner. PEIX could be a $45-$50 stock but they need to continue to BEAT earnings quarter-after-quarter (like GPRE did).
You are correct. PEIX was at $10.56 not to long ago!! And now it is over $18!!! Can you say PROFIT $$$$$?
You seem to really care about your fellow investors on here. That is so nice of you to tell them to sell while PEIX continues to be GREEN each day. You are very thoughtful. I'm sure it has nothing to do with your own greedy self-interest.
You kind of wonder where Ray even came from and how he gets access to the internet.
Maybe they let him play on the computer at the "institution" a few times a day?
PEIX closed above $18 today - A VERY BULLISH SIGN. PEIX was crossed over $18 a few times last week only to fall back on short selling and sellers. However, today PEIX crossed $18 and stayed above it.
If you look at the chart, PEIX has had a steady upward climb since the sell-off last quarter. This climb could continue with a good earnings report as the catalyst. Plus, I would expect that the 16% short interest will need to cover their positions once PEIX reaches the $23-$25 mark.
I also would expect a lot of the warrants to be retired in Q2. The warrants are "in the money" and there is no reason for them not to be exercised. The warrants will generate cash for the company but will have a dilutive effect on EPS.
I would expect the strong operating margins to continue through Q2 and the rest of the year, but we'll have to wait and see how good they really are.
A similar sell-off could happen again.
Stocks are notorious for "buying the rumor, selling the news".
So we could see a big run-up to earnings followed by a sell-off.
As such, I'm getting positioned so that if either happens - I stand to profit from it.