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 BioFuel Energy ( BIOF) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified BioFuel Energy as such a stock due to the following factors:
- BIOF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.9 million.
- BIOF has traded 604,335 shares today.
- BIOF is down 5.1% today.
- BIOF was up 14.8% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in BIOF with the Ticky from Trade-Ideas. See the FREE profile for BIOF NOW at Trade-Ideas More details on BIOF: BioFuel Energy Corp. does not have significant operations. Previously, it operated two dry-mill ethanol production facilities in Minnesota that produced ethanol and its related co-products, primarily grain and corn oil. The company was founded in 2006 and is headquartered in Denver, Colorado. The average volume for BioFuel Energy has been 1.1 million shares per day over the past 30 days. BioFuel Energy has a market cap of $41.5 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 5.80 and a short float of 20.8% with 0.32 days to cover. Shares are up 411.7% 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 BioFuel Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and poor profit margins. Highlights from the ratings report include:
- The debt-to-equity ratio is very high at 3.98 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.13, which clearly demonstrates the inability to cover short-term cash needs.
- 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, BIOFUEL ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for BIOFUEL ENERGY CORP is currently extremely low, coming in at 4.42%. Regardless of BIOF's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, BIOF's net profit margin of -5.64% significantly underperformed when compared to the industry average.
- BIOFUEL ENERGY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, BIOFUEL ENERGY CORP reported poor results of -$7.62 versus -$2.60 in the prior year.
- BIOF, with its decline in revenue, underperformed when compared the industry average of 7.6%. Since the same quarter one year prior, revenues fell by 31.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full BioFuel Energy 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.