NEW YORK (TheStreet) --Pacific Ethanol (PEIX) fell 7.4% to $21.31 Thursday, and continues to fall in after-hours trading, on fears that the U.S. ethanol industry could soon see an increase in Brazilian imports.
On Wednesday Brazil approved a tax credit for ethanol exporters in the country. Brazil's Finance Minister said the tax credit "will help exporters because it cheapens the Brazilian export and pays a devaluation of the exchange rate."
Demand for ethanol in Brazil fell over the past few yeas due to a decrease in flex-fuel cars in the country, according to Bloomberg. In 2013 25% of flex0fuel vehicles in Brazil used ethanol, down from 82% in 2009.
TheStreet Ratings team rates PACIFIC ETHANOL INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PACIFIC ETHANOL INC (PEIX) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."