- Confusion: This is, unfortunately, my best guess for the move. Several news outlets have linked this story to the ticker page of Ceres in recent days. I’ll be happy to inform people that Ceres Ag — the Toronto-based company building a commodity logistics hub — is not the same company as the energy crop company hip-deep in agricultural fields in Brazil. If you bought shares due to this confusion, go to your brokerage account and sell your shares now before you finish reading the article. I’ll wait.
The take-home is that nothing actually happened to warrant this move. If the possible link to Toronto-based Ceres Ag isn’t enough to scare you away, consider that even with all of the potential behind Ceres it won’t be completing major sales of seeds until December of this year. The company raked in just $5.4 million in revenue in its latest fiscal year (ended August 2012) and lost over $29 million.
I can certainly see the potential of its business model, especially if performance metrics can be believed, but I just don’t see the point of rushing into a position now. It will take years for Ceres to build a respectable business. I can wait until the prospects warrant much less risk. If a buyout isn’t in store and this is just a momentum trade, then there is absolutely nothing that will keep the valuation at $100 million. I’m on the sidelines for this one. In fact, I’m walking to the concession stand until there is actually something to talk about.
The article Stay Away From This Overnight Multibagger originally appeared on Fool.com is written by Maxx Chatsko.
Fool contributor Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolio, his CAPS page, or follow him on Twitter @BlacknGoldFool to keep up with his writing on energy, bioprocessing, and biotechnology.The Motley Fool has no position in any of the stocks mentioned.
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