Boston, MA 09/23/2014 (wallstreetpr) – After weeks of pounding, Pacific Ethanol Inc. (NASDAQ:PEIX) could finally be finding it’s way back in the market in terms of stock price. The company has mostly been affected by the ongoing wave of sales, which has affected share price awaiting to see if it’s performance will improve in the coming weeks.
Improving Fundamentals
Pacific Ethanol Inc. (NASDAQ:PEIX) has not had the best of runs in the industry at the back of a massive downturn in 2012 a problem that was’ further compounded by drought in 2013 that resulted in high corn prices. Pacific Ethanol does not solely rely on the sale of ethanol for profits but also deals in wet distillers commonly used as a nutritional animal feed. The company also relies on integrated oil companies for huge supplies as they normally blend ethanol with gasoline that they sell to end consumers.
On it’s Q2 conference, PEIX reiterated that fundamentals in the market were substantially improving as demand for ethanol and other ethanol by-products continue to grow. Corn prices are reportedly trading at half the price that they did trade at, two years ago. The company’s management team attributes the recent downturn in stock price to a decline in demand, which it believes is a temporary overreaction.
Ethanol Demand to Improve
Pacific Ethanol Inc. (NASDAQ:PEIX) remains confident that demand will pick up in the coming weeks. The company also notes that it’s balance sheet has improved over the past four years from the point of near collapse in 2010 and 2012. Being net debt-free remains one of the positives that is keeping the management team going in working hard to improve on profit margins.
Pacific Ethanol Inc.(NASDAQ:PEIX) also notes that 2014 remains one of the finest in terms of corn harvest, as yields remain high as well as substantial improvements in inventory levels. The push by authorities to force oil companies to blend ethanol into fuels is also expected to open other business opportunities for the company in terms of increased demand.
