Small Cap Strategist is published by Crystal Equity Research an independent research resource on small capitalization stocks. Follow along as we discuss the most recent trends in the small-cap sector, investigate interesting companies and pan a few not-so-promising stocks.
by stock prices, investors have decided Ceres, Inc. (CERE:Nasdaq) is the favorite horse in the cellulosic
ethanol race-at least among those that have publicly
traded stocks.Ceres develops and sells
sorghum, switch grass and miscanthus seeds to feedstock growers that supply
cellulosic ethanol mills. The stock is selling for a buck and change, which is far
more impressive that the stocks of most companies that could be included in the
“cellulosic biofuel” sector.
announced fiscal second quarter 2014 results at the beginning of this
month.The company cited sorghum
plantings this season for forty-nine customers in Brazil.That sounds impressive, but most of the
plantings are for sampling and testing so that mills can evaluate potential
yield.It is not like Ceres has not been
testing its sorghum.The company used a
grant from the Department of Energy to test various plant traits.Ceres has done so well with its plant trait
development it was able to get a U.S. patent for a sorghum-derived gene
reported $4.0 million in total sales over the last twelve months.Profits are still on management’s wish
list.The company is still using cash to
support operations-$5.7 million in the November 2013 quarter.The good news is that the cash burn rate has
been brought down to from a run rate near $28 million in fiscal year 2013 to
$23 million per year.Management has undertaken some cost cutting
measures that appear to be yielding results.
proof is always in the pudding.For Ceres
the pudding is in forty-nine sorghum field trials in Brazil.Orders from any one of those Brazil mills is
a solid endorsement for Ceres and provides a compelling support for the value
of the company’s new patent.
Neither the author
of the Small
Cap Strategist web log, Crystal Equity
Research nor its affiliates have a beneficial interest in the companies