The company, which markets and produces low-carbon renewable fuels, announced that it priced an underwritten offering of 1.75 million shares of its common stock at a price to the public of $16.00 per share.
Pacific Ethanol is expecting the net offering proceeds from the offering to be approximately $26 million. The company plans to use part of the net proceeds to pay outstanding principal, accrued and unpaid interest owed under terms of its senior unsecured notes.
The offering is expected to close on April 8, 2014.
TheStreet Ratings team rates PACIFIC ETHANOL INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PACIFIC ETHANOL INC (PEIX) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 7.9%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 190.00% and other important driving factors, this stock has surged by 172.34% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The gross profit margin for PACIFIC ETHANOL INC is currently extremely low, coming in at 10.03%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.99% trails the industry average.
- The debt-to-equity ratio of 1.23 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, PEIX's quick ratio is somewhat strong at 1.43, demonstrating the ability to handle short-term liquidity needs.
- You can view the full analysis from the report here: PEIX Ratings Report