Pre-Market Activity Shows Heavy Volume And Movement For Gevo (GEVO)

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.

Trade-Ideas LLC identified Gevo ( GEVO) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Gevo as such a stock due to the following factors:

  • GEVO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.2 million.
  • GEVO traded 486,863 shares today in the pre-market hours as of 8:03 AM, representing 10.9% of its average daily volume.

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More details on GEVO:

Gevo, Inc., a renewable chemicals and biofuels company, focuses on the development and commercialization of alternatives to petroleum-based products based on isobutanol produced from renewable feedstocks. The company operates in two segments, Gevo, Inc.; and Gevo Development/Agri-Energy. Currently there are 2 analysts that rate Gevo a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Gevo has been 326,100 shares per day over the past 30 days. Gevo has a market cap of $23.6 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 5.28 and a short float of 7.2% with 0.07 days to cover. Shares are down 58.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Gevo as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The gross profit margin for GEVO INC is currently extremely low, coming in at 1.37%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, GEVO's net profit margin of -116.60% significantly underperformed when compared to the industry average.
  • GEVO's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 83.76%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • 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, GEVO INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is somewhat low, currently at 0.86, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.73 is somewhat weak and could be cause for future problems.
  • Net operating cash flow has significantly increased by 58.35% to -$6.38 million when compared to the same quarter last year. In addition, GEVO INC has also vastly surpassed the industry average cash flow growth rate of -42.26%.

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