Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Here’s Why Pacific Ethanol Inc (PEIX) Is Trending Higher Today

Page 1 of 2

Pacific Ethanol Inc (NASDAQ:PEIX)‘s stock has been on a steady decline since mid-May losing about 37.2% of its value. However, the stock was gaining traction today ahead of the release of its financial results on Wednesday, and had risen by almost 10% by midday and then retracted to around 3%. The company is expected to deliver an EPS of $0.09 and revenues of $265.22 million for the second quarter.

Considering that Pacific Ethanol Inc (NASDAQ:PEIX) is trading just 8.9% above its 52 week low, concerns that the stock might be oversold could be one of the reasons why the stock is trending higher today. In fact, from the perspective of technical analysis this hypothesis is confirmed by the Relative Strength Index (RSI), which stands at 28.68 for Pacific Ethanol Inc (NASDAQ:PEIX) signaling an oversold range. Whether this is just a dead cat bounce or the beginning of a prolonged upward trend for the $308.10 million leading producer and marketer of low-carbon renewable fuels in Western U.S. will be more clear after Wednesday.



As far as the moves of professional money managers are during the first quarter are concerned, Pacific Ethanol Inc (NASDAQ:PEIX)’s prospects look promising. Among the hedge funds that we track a total of 20 funds had an aggregate investment of $64.48 million in the company at the end of March, up from 17 firms with $58.75 million at the end of the previous quarter. The stock was trading nearly sideways during these three months.

Most investors can’t outperform the stock market by individually picking stocks because stock returns aren’t evenly distributed. A randomly picked stock has only a 35% to 45% chance (depending on the investment horizon) to outperform the market. There are a few exceptions, one of which is when it comes to purchases made by corporate insiders. Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012. We have been forward testing the performance of these stock picks since the end of August 2012 and they have returned more than 144% over the ensuing 32 months, outperforming the S&P 500 Index by nearly 85 percentage points (read the details here). The trick is focusing only on the best small-cap stock picks of funds, not their large-cap stock picks which are extensively covered by analysts and followed by almost everybody.

Insider trading is another useful indicator that reflects the management’s take on the company’s future prospects.  However, unfortunately no such activity has been detected in Pacific Ethanol Inc (NASDAQ:PEIX) so far this year.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!