Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. Trade-Ideas LLC identified Pacific Ethanol ( PEIX) as a "perilous reversal" (up big yesterday but down big today) 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 $24.8 million.
- PEIX has traded 285,419 shares today.
- PEIX is down 6.3% today.
- PEIX was up 65.4% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in PEIX with the Ticky from Trade-Ideas. See the FREE profile for PEIX NOW at Trade-Ideas More details on PEIX: Pacific Ethanol, Inc. produces and markets low carbon renewable fuels in the United States. It sells ethanol to gasoline refining and distribution companies. The average volume for Pacific Ethanol has been 740,300 shares per day over the past 30 days. Pacific Ethanol has a market cap of $151.2 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 3.12 and a short float of 24.7% with 1.43 days to cover. Shares are up 77.4% year-to-date as of the close of trading on Wednesday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. 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 generally high debt management risk and poor profit margins. Highlights from the ratings report include:
- Currently the debt-to-equity ratio of 1.70 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, PEIX has managed to keep a strong quick ratio of 1.91, which demonstrates the ability to cover short-term cash needs.
- The gross profit margin for PACIFIC ETHANOL INC is currently extremely low, coming in at 2.80%. 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 -2.12% trails the industry average.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PACIFIC ETHANOL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- PACIFIC ETHANOL INC has improved earnings per share by 46.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PACIFIC ETHANOL INC swung to a loss, reporting -$2.70 versus $1.80 in the prior year. This year, the market expects an improvement in earnings (-$0.85 versus -$2.70).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 16.7% when compared to the same quarter one year prior, going from -$5.97 million to -$4.97 million.
- You can view the full Pacific Ethanol Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.