PEIX - Examining The Long Thesis For Pacific Ethanol
Ethanol producer Pacific Ethanol (PEIX) reported Q2 earnings last week that missed on both lines as an improved revenue result YoY was unable to prevent the company from incurring a substantial net loss. The company's share price dropped sharply on the news, eliminating the gains of a mid-July rally and bringing its YTD performance down to almost -50% (see figure). Despite the company's poor performance during a quarter in which the broader ethanol sector saw margins rebound from their Q1 lows, Pacific Ethanol's management concluded that the second half of 2018 would see