Trade-Ideas LLC identified

Pacific Ethanol

(

PEIX

) as a strong 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 $3.4 million.
  • PEIX has traded 88,453 shares today.
  • PEIX is trading at 2.11 times the normal volume for the stock at this time of day.
  • PEIX is trading at a new high 4.04% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 United States. The company operates through two segments, Production and Marketing. Currently there are 4 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 641,900 shares per day over the past 30 days. Pacific Ethanol has a market cap of $215.8 million and is part of the basic materials sector and energy industry. The stock has a beta of 2.17 and a short float of 15.6% with 7.39 days to cover. Shares are up 14% year-to-date as of the close of trading on Thursday.

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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, weak operating cash flow, disappointing return on equity, generally disappointing historical performance in the stock itself and poor profit margins.

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 202.0% when compared to the same quarter one year ago, falling from -$4.38 million to -$13.23 million.
  • Net operating cash flow has significantly decreased to -$5.16 million or 170.46% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PACIFIC ETHANOL INC's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 47.98%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 68.42% 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.
  • The gross profit margin for PACIFIC ETHANOL INC is currently extremely low, coming in at 2.84%. Regardless of PEIX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -3.86% trails the industry average.

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