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Pacific Ethanol Rockets 400% in a Month: Are you Excited?

The markets have slowly but surely made a comeback over the past two months or so after struggling considerably owing to the coronavirus pandemic induced panic. However, many of those stocks have now started to make a comeback and one of the more interesting gainers on Tuesday was the Pacific Ethanol Inc’s (NASDAQ:PEIX) stock.

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The company reported its financial results for the second fiscal quarter on Tuesday and that set off another rally in the stock. The Pacific Ethanol stock has rallied by as much as 400% over the course of the past month and in such a situation, it could worthwhile for investors to perhaps take a closer look at the developments at Pacific Ethanol.

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Pacifica Ethanol’s performance in the second fiscal quarter was rather impressive as it managed to generate a net income of as much as $15 million. In this regard, it is also necessary to point out that in the same quarter in 2019, the company had reported a loss, and hence, the swing back to profits has understandably warmed up investors again.

The company announced that its profits worked out to earnings of 27 cents a share. However, once adjusted for non-recurring costs, the earnings per share jump to 29 cents, and revenues for the quarter came in at $212.1 million. There was a rally in the stock as well and it hit $3.50 a share on Tuesday. It marks a remarkable turnaround for Pacific Ethanol, which had been trading at only 56 cents a share around a year ago.

However, that is not all. Investors need to keep in mind that there has been other positive development at Pacific Ethanol as well and those have contributed towards the strong rally in the stock in recent times. The company announced this week that it received a letter from the NASDAQ Stock Market dated August 6 which notified that Pacific Ethanol regained compliance.

The stock had received a warning letter after the minimum closing bid price for the stock had gone below $1 a share. It is another shot in the arm for the stock and is also going to go a long way in restoring the confidence of investors.

Towards the end of July, the company had announced that it is going to expand its capabilities with regards to the production of USP grade high-quality alcohol. The extra alcohol is going to be produced at its facility in Pekin, Illinois and the total production for the year is going to hit as much as 30 million gallons a year. The capacity will be in place by the time the fourth quarter of the year comes along. There is a growing demand for this form of alcohol at this point.

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