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Based on RSI and MACD divergences and OBV, the selling pressure on AVR is waning and the stock should have a nice rally if not more from this price point. Stop loss is below $4 and any price above this can be bought against that loss level.
Unfortunately ethanol is going to be part of our future for years to come and the plant assets that Aventine has cannot be replicated for anywhere near book value. Margins may be tight currently but they will widen as more and more jurisdictions require minimum ethanol content. As well, corn prices look like they are topping with a sizable correction probable shortly. This could be the catalyst needed to kickstart AVR.
A likely price target is $9 and possibly $12 in the next couple months as shorts race to cover.
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guliamo
Jul 03 at 10:35 ET
You are a braver man than I, my dear count.. This company looks in deep doodoo.. how can you be selling ethanol and still have a negative cash flow of 260 million?... sounds like something's fishy in suburbia.. what do you think?
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CountdeMonet
Jul 03 at 8:31 ET
gualiamo, not sure where that number comes from. Operating cash flow is positive as of last quarter and annually. http://finance.yahoo.com/q/cf?s=AVR Technically speaking, the charts tell me this is no longer a short and if so then it must be a long. Also, the stop is nice and tight at $4.
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guliamo
Jul 04 at 4:44 ET
I admit I am a complete novice at technical indicators etc, though I would love to learn more..
I DID take the figure from Yahoo Finance! - it says in the "Key Statistics" page:
Cash Flow Statement
Operating Cash Flow (ttm): 58.89M
Levered Free Cash Flow (ttm): -246.29M
Do those represent YOY stats?
furthermore, the cash flow statement itself says:
Change In Cash and Cash Equivalents ($12,620)
I would love to know more about this, thanks.
/g
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shlomi
Jul 06 at 11:08 ET
Interesting stuff, after a small research (Initiated by CountdeMonet Post), it looks like AVR could be an opportunity.
I'll be sure to add it to my watch list, thanks.
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CountdeMonet
Jul 06 at 12:52 ET
guliamo, in this case you need to look at the detail of the cash flow since they have invested their cash (albeit in ASR's) so that negative number doesn't mean anything in terms of their true cash position or cash generation, and it was for 2007.
Check out http://en.wikipedia.org/wiki/Cash_flow_statement to get a better understanding of cash flow and www.investopedia.com for technical analysis as well as pick up a couple books on TA as its invaluable even for those who mostly do fundamental analysis.
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guliamo
Jul 08 at 4:12 ET
Or better yet, get good advice from the count ;)
I choose my stocks based on pure projection of where their markets are heading. I then apply a few simple ratios or metrics and base my choices on a more spiritual analysis..
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CountdeMonet
Jul 16 at 11:52 ET
Bueller?
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ramigabai
Jul 16 at 12:09 ET
nice move CountdeMonet!! AVR is 11% up today
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CosmicFool
Sep 10 at 4:01 ET
I like the spiritual approach, it's similar to mine. The fools say it's a good company, I believe them and buy it, then I leave it all alone unless something is spinning out of control. I had I missed the nice rally for AVR, oh well!