Archive for the ‘Industrial Stocks’ Category

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Pacific Ethanol, Inc. (PEIX) – Buzz Stock of the Day

Tuesday, August 17th, 2010

We first covered Pacific Ethanol, Inc. (Nasdaq: PEIX) on June 30, 2010, after the company announced that four of its wholly-owned subsidiaries had emerged from bankruptcy. Shares were up almost 60 percent on that day, from the previous day’s closing price.

Shares of Pacific Ethanol surged again on Tuesday, this time as much as 42 percent from the previous day’s closing price after the company posted earnings of $107.8 million or $1.43 per share for the three months ended June 30, compared to a loss of $28.2 million or 49 cents per share in the same period last year. The boost in earnings was primarily due a non-cash gain of $119 million, and an 88 percent increase in total gallons sold, offset by a  lower average price per gallon.
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Net sales in the quarter increased 9 percent to $76.8 million, compared to $70.1 million in the same quarter a year ago. The company also reduced its SG&A expenses by 49 percent, and improved adjusted EBITDA by $8.4 million, compared to the second quarter of 2009.

Pacific Ethanol’s CEO Neil Koehler described the second quarter as “pivotal” for the company. “We delivered sales growth, dramatically reduced operating expenses, and improved adjusted EBITDA,” he said in a statement. “We successfully led the production facilities out of bankruptcy effective June 29th, substantially reducing our debt and other liabilities by $295 million. During the quarter, we also reduced other debt by $9 million. In addition to strengthening our balance sheet, we reduced selling, general and administrative expenses to less than half of what they were for the same quarter last year, thus establishing a stable platform for growth.”

On June 29, 2010, PEI’s wholly-owned plant holding company, PEH, and its four plant subsidiaries exited bankruptcy and the ownership of PEH was transferred to certain lenders. As a result, PEI recorded a $119.4 million non-cash gain from the disposition of liabilities of $294.5 million net of assets of $175.1 million that were removed from its balance sheet. Simultaneously, PEI began operating under its newly announced operating and marketing agreements with the ethanol production facilities upon their emergence from bankruptcy.

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Guanwei Recycling Corp. (GPRC) – Buzz Stock of the Day

Wednesday, August 4th, 2010

Shares of Chinese polyethylene manufacturer, Guanwei Recycling Corp. (Nasdaq: GPRC) were up more than 20 percent from Tuesday’s closing price in morning trading on Monday. Trading volume was more than 10 times the company’s three-month average.

“China, right now is the biggest plastic importer in the world,” said Guanwei Recycling’s VP of marketing Liya Wu, in an interview with TheStreet.com. “Our annual import of plastic waste is about…5 million tons to 7 million tons. So it’s really the biggest market. China is not only the biggest market not only in the volume of the plastic manufacturer, but also as a plastic products exporter, and we are the biggest recycler of plastics.”
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Guanwei Recycling generates most of its business from Europe. Most recently, the company announced a sales contract with Sunshine Handels & Consulting GmbH, a leading German recycling company, for the purchase of 25,000 tons of LDPE waste through June 2011, which will be converted into recycled LDPE at Guanwei’s clean tech facilities in Fuqing City. Europe, has a “higher waste classification system” than the U.S., according to Wu.

Guanwei is currently focused on increasing its environmental protection levels, and increasing its manufacturing capacity, according to Wu.

For the three months ended March 31, 2010, net revenue was $9,494,226, representing a 58.01% decrease from net revenue of $22,611,689 for the three months ended March 31, 2009. This sharp decrease was primarily caused by the fact that, unlike the first quarter of 2009, Guanwei did not sell any raw materials or purchased recycled LDPE during the first quarter of 2010.

Shares are currently trading about about 21 percent lower than the company’s 52-week high of $5.70.

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United Rentals, Inc. (URI) – Buzz Stock of the Day

Wednesday, July 21st, 2010

Shares of equipment rental company, United Rentals, Inc. (NYSE: URI) were up as much as 16 percent from Tuesday’s closing price, in morning trading Wednesday after the company reported a surprising second quarter profit, and raised its outlook for capital spending based on increased demand.

Net income in the three months to June 30 was $12 million, or 18 cents per share, reversing a loss of $17 million, or 28 cents, a year earlier. Revenue fell 9 percent to $557 million from $615 million a year ago.

Analysts polled by Thomson Reuters expected a loss of 30 cents per share on revenue of $525 million.

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United Rentals also raised its outlook for net rental capital spending to $160 million to $180 million for the year, up from $100 million to $120 million seen previously, “to meet increased demand.” The figure measures the difference between spending on new rental equipment and sales of used rental equipment. The company also reaffirmed its outlook for free cash flow of between $200 million and $225 million for the year.

Rental use of the company’s fleet rose 4.1 percentage points 65.4%, a record for any second quarter, the company said. However, rental rates dipped 2 percent from the prior year.

“This was a strong quarter with a number of positive trends in the underlying metrics,” said United Rentals’ CEO Michael Kneeland in a statement. “Our same-store rental revenues increased 2.7%, with year over year growth in six of our nine operating regions. We reported the highest time utilization of any second quarter in our company’s history. Rental rates, while down year over year, improved sequentially each month. We are also running the business much more efficiently and spending capex where it counts, purchasing fleet that we are confident will be in demand by our target accounts.”

Kneeland also noted that United Rentals is expecting a “choppy” recovery, but believes the company is “seeing the early stages of a cyclical upturn on top of the normal seasonal benefit.”

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Verenium Corp. (VRNM) – Buzz Stock of the Day

Thursday, July 15th, 2010

Shares of biofuels developer Verenium Corp. (Nasdaq: VRNM) surged as much as 86 percent from Wednesday’s closing price, in morning trading on Thursday after the company announced that BP (NYSE: BP) will pay $98 million for technology and facilities developed by Verenium.

“This agreement should give both companies the flexibility to pursue the growth opportunities in the respective businesses and achieve goals in the near-term,” said Verenium’s president and CEO Carlos A. Riva. ” As a result of this transaction, Verenium will have the resources to grow our commercial enzyme business while maintaining strategic access to the emerging cellulosic ethanol market in a manner that better fits our resources.”
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Under the terms of the agreement, BP will acquire Verenium’s Jennings, Louisiana facilities, including a pilot plant and demonstration scale facility; Verenium’s research and development facilities in San Diego; cellulosic biofuels technology and related intellectual property; and Verenium’s cellulosic enzyme technology and related intellectual property. BP will also retain scientists and technology experts necessary to move the projects forward.

Verenium, which is based in Cambridge, Mass., will retain its core commercial enzyme business, the ability to access select biofuels products developed by BP using the technology BP acquired, the ability to transition out of its San Diego R&D facility over the next two years, $98.3 million in cash, and an additional $10.8 million in cash to be released upon assigning the lease of Verenium’s R&D facility to BP.

BP will become the sole investor in Vercipia Biofuels, a 50-50 joint venture formed by BP and Verenium in February 2009, and will independently manage all of Vercipia’s activities going forward. Similarly, Galaxy Biofuels, a 50-50 joint development company owned by BP and Verenium, will be owned 100% by BP.

The transaction is expected to close in the third quarter of 2010.

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Buzz Stocks Week in Review – IDT, CWLZ, PEIX, ARNA

Friday, July 2nd, 2010

Average Weekly Gain: 37.3%


Monday: Our Buzz Stock of the Day on June 28, IDT Corp. (NYSE: IDT) had a great week. IDT, which blends a strange pairing of telecom and energy had positive momentumthroughout the week. Shares began their climb on Monday, after a CNBC interview in which CEO Howard Jonas outlined the company’s shale properties and oil extraction technology. IDT’s energy business, Genie Energy, holds IDT’s interests in the American Shale Oil, LLC (AMSO), a joint oil shale research and development venture in Colorado with Total, S.A.; and in Israel Energy Initiatives (IEI), which holds an exclusive shale oil exploration and production license in the Shfela region of Israel. According to Jonas, it costs IDT Corp. $25 per-barrel to extract oil from shale rock. This figure is about $10 less than ultra-deep water fuel extraction — the kind of extraction that was being used by British Petroleum (NYSE: BP) in the Gulf of Mexico.

Up as much as 57 percent since our post.

Tuesday: On Tuesday, we featured Cowlitz Bancorp. (Pink Sheets: CWLZ) as our Buzz Stock of the Day. Cowlitz shares were up about 25 percent from Monday’s close, in morning trading on Tuesday after the company announced that it presented an updated plan to regain compliance with two Nasdaq Listing Rules with which it is not in compliance and requested a 90-day exception to the continued listing standards. Unfortunately, Cowlitz was de-listed from the Nasdaq on Thursday, July 1. Cowlitz received a  delisting determination letter from Nasdaq due to the Company not being in compliance with the minimum 500,000 publicly held shares requirement set forth in Listing Rule 5550(a)(4), on May 12.

Wednesday: Shares of Pacific Ethanol, Inc. (Nasdaq: PEIX) surged almost 60 percent on Wednesday, after the company announced that four of its subsidiaries had emerged out of bankruptcy. The plant subsidiaries, which are now owned by a newly formed holding company, will continue to be staffed, managed and operated by Pacific Ethanol under a fee and profit-sharing arrangement negotiated with the owners of the newly formed holding company. Pacific Ethanol, Inc. eliminated approximately $290 million in debt and other liabilities from its balance sheet. The bankruptcy did not affect the Company’s ownership structure and the Company continues to be owned by its existing common and preferred stockholders.
Up as much as 31 percent since our post.

Thursday: Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) was up 20 percent from Wednesday’s close, in morning trading on Thursday after the company announced that Japanese drug maker, Eisai, Inc. will market Arena’s obesity treatment lorcaserin in the U.S. The U.S. Food and Drug Administration is already reviewing lorcaserin, and a decision is expected on Oct. 22. The main concern with lorcaserin is that patients treated with the drug in two pivotal phase III studies didn’t lose much weight — a little more than 3% on a placebo adjusted basis. The biggest plus in lorcaserin’s corner is the drug’s safety and tolerability, which appear better than competing drugs.
Up as much as 24 percent since our post.

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