Trade-Ideas LLC identified

Pacific Ethanol

(

PEIX

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Pacific Ethanol as such a stock due to the following factors:

  • PEIX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.4 million.
  • PEIX has traded 95,667 shares today.
  • PEIX is trading at 2.24 times the normal volume for the stock at this time of day.
  • PEIX is trading at a new low 7.12% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on PEIX:

Pacific Ethanol, Inc. produces and markets low-carbon renewable fuels in the Western United States. It sells ethanol primarily to gasoline refining and distribution companies. The company also provides ethanol transportation, storage, and delivery services through third-party service providers. Currently there are 3 analysts that rate Pacific Ethanol a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Pacific Ethanol has been 838,500 shares per day over the past 30 days. Pacific Ethanol has a market cap of $232.2 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.80 and a short float of 17.7% with 3.51 days to cover. Shares are up 11.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Pacific Ethanol as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 106.0% when compared to the same quarter one year ago, falling from $12.52 million to -$0.75 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, PACIFIC ETHANOL INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for PACIFIC ETHANOL INC is currently extremely low, coming in at 2.53%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.19% trails that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 47.50%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 106.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • PACIFIC ETHANOL INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PACIFIC ETHANOL INC swung to a loss, reporting -$0.55 versus $0.64 in the prior year. This year, the market expects an improvement in earnings ($0.36 versus -$0.55).

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