Friday, June 24, 2016

Astec Industries: Overlooked

Tucked away in the blue hills of Tennessee, Astec Industries (ASTE:  Nasdaq) is overlooked by investors.  Astec supports the heavy construction industry with materials, components and equipment.  The company is included in our Mothers of Invention Index of companies bringing efficiency to resource utilization.  Top among in the company’s product line is equipment for wood pellet plants. 
Among Astec’s most recent customers is Highland Pellets.  Highland is building a $130 million wood pellet facility near Pine Bluff, Arkansas. Highland intends to use unused forest dregs, logging leftovers, deadwood, thinned trees, and imperfect commercial trees.  The pellets will be sold to utilities converting coal power plants to biomass.

Tuesday, June 21, 2016

Trex in the Summer of Small-caps

It appears to be the ‘summer of the small-cap’ as performance in the sector outpaces other sectors on the first day of summer 2016.  In keeping with the adage “make hay while the sun shines”, we shifted into a higher gear to find promising small companies that might participate in the small-cap renaissance.  Trex Company (TREX:  Nasdaq) bubbled to the top of a couple different screens based on growth and return.  There is much to like in a company delivering strong growth.  A bargain price is just icing on the cake.  With a ratio of 0.77 in price/earnings to growth, Trex is well frosted.

Friday, June 17, 2016

Capstone Turbine: Not a Pretty Picture

Last week microturbine manufacturer Capstone Turbine (CPST:  Nasdaq) reported financial results for the final quarter of its fiscal year ending March 2016.  Sales were $18.9 million in the quarter, bringing total sales for the year to $85.2 million.  FY2016 sales shrank 26.2% from the prior fiscal year for the second year in a row.  Some shareholders may be taking solace in the FY2016 net loss of $25.2 million or $1.39 per share in that it is an improvement over the even deeper loss in the year before.  That does not necessarily mean that operating performance has improved for Capstone.  The year-over-year comparison is muddied by a special charge in FY2015 for bad debt expense totaling $10.1 million.  Then in the more recently reported FY2016, $1.5 million in bad debt recovery worked in the company’s favor.
No one should be surprised at recent deep losses.  Capstone Turbine has been reporting operating and net losses since  -  well, since the beginning.  The continued deep losses beg the question:  will Capstone Turbine every turn a profit?

Tuesday, June 14, 2016

Green Plains Prepares to Pump

Beaumont, TX Port
Ethanol producer Green Plains (GRPE:  Nasdaq) announced today plans to build a fuel terminal point in Beaumont, Texas.  The terminal will be located at a facility owned by Green Plains’ partner in the venture, Jefferson Gulf Coast Energy Partners.    It will be helpful to have a friend in the project that is expected to cost $55 million to complete just ethanol storage and throughput capacity.  Planned storage capacity is equivalent to 500,000 barrels, with the potential to expand to 1.0 million barrels.  Capacity to handle biofuels or other hydrocarbon fuels will be added later.  The terminal should give Green Plains better access to world fuel markets through railroad, barge and ocean tankers connections at the terminal.