Topic: How To Invest

Pat: I would much appreciate your candid analysis of a company’s prospects. What are your thoughts on Pacific Ethanol? Thanks.

Article Excerpt

Pacific Ethanol, $21.30, symbol PEIX on Nasdaq (Shares outstanding: 20.3 million; Market cap: $509.2 million; www.pacificethanol.net), produces and markets ethanol in the western U.S., primarily California, Arizona, Nevada, Utah, Oregon, Colorado, Idaho and Washington. Ethanol is a liquid alcohol obtained by fermenting sugar or starch converted to sugar. In Canada and the U.S., fuel ethanol is made from grains, such as corn, wheat and barley. Small quantities have been made on an experimental basis from low-cost agricultural cellulosic biomass, like trees and grasses. In its pure form, ethanol can be used as a fuel for cars, but it is usually used as a gasoline additive to increase octane and reduce vehicle emissions. Pacific Ethanol sells to integrated oil firms and gasoline marketers who blend ethanol into fuel. It also sells related products, including wet distillers grain, an animal feed made of waste from ethanol production. The company owns 91% of PE Op Co., which has four ethanol plants. Pacific Ethanol operates and manages these…