Vertex Energy Inc. (OTC: VTNR.OB) has watched the share price of its penny stock drop -18.26% since they announced Q1 expectations. Wierd since when a company comes out and says that Q1 results for Revenue, Net Income and Gross Profit will be significantly better than the same period from the year before. VTNR traded just 46,700 shares in the last trading session before closing down -0.53% at $1.88. So what gives?
Vertex Energy, an environmental services company that recycles industrial waste streams and off-specification commercial chemical products, is looking to announce Q! results on Tuesday of this week which will include Revenues of more than $30 million for Q1, 2012. $30 million is 30 Million times more revenue than that “POS” SNPK had since its inception, but it trades more than a Playboy magazine on a submarine. Hey Vertex, call us. Something has to be done about this.
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VTNR Stock Chart:
Market Cap: 17.75M
Price/Sales (ttm): 0.16
Price/Book (mrq): 1.91
Most Recent Quarter
(mrq): Dec 31, 2011
Profit Margin (ttm): 5.24%
Operating Margin (ttm): 3.62%
Shares Outstanding: 9.44M
% Held by Insiders: 58.42%
The expected announcement on Tuesday will report a 50% increase in Revenues over the same period a year ago, Gross Profit to range between $2.6 and $2.9 million, and Net Income to range between $1.5 and $1.7 million. During the first quarter 2011 VTNR reported revenue of $20 million, gross profit of $2.3 million and net income of $1.2 million.
But wait, for the first quarter of 2010, Vertex energy reported revenue of $13.27 million, gross profit of $1.027 million and net income of $270 thousand. For the first quarter of 2009, they reported revenue of $7.7 million, gross profit of $18.5 thousand and a net loss of $614 thousand. Does anyone else see a pattern which has developed here? This is one hell of a damn good company and maybe even the best penny stock ever.
Ben Cowart, CEO and Chairman of Vertex Energy said, “With this great start and our focus on our growth strategy, we are confident that 2012 would be another robust year for the Company.” You think?
Vertex reported $109.8 million in revenues fye December 31, 2011 compared to $58.1 million fye December 31, 2010. Net Income for the two years reported was $5.75 million and $ 1.23 million respectively.
Vertex Energy is an environmental services company that recycles industrial waste streams and off-specification commercial chemical products. The company manages the transport, storage and delivery of the aggregated feedstock and product streams to end users.
Vertex operates in two divisions:
- Black Oil Division
- Refining and Marketing Division
Black Oil Division
This division, which has been in business since 2001, aggregates and sells used motor oil. The Company has a network of approximately 50 suppliers that collect used oil from businesses such as oil change service stations, automotive repair shops, manufacturing facilities, petroleum refineries, and petrochemical manufacturing operations. Vertex purchases the used oil from collectors and manage the logistics of transport, storage and delivery to their customers.
Refining and Marketing Division
This division, which has been in business since 2004, aggregates used motor oil, petroleum distillates, transmix and other off-specification chemical products. These feedstock streams are purchased from pipeline operators, refineries, chemical processing facilities and third-party providers. The Company has toll-based processing agreements and/or understandings in place with Cedar Marine Terminal and KMTEX, Ltd. to re-refine these feedstock streams, under the direction of Vertex Energy, into various specified end products.
Cedar Marine Terminal is a related party and uses a proprietary Thermal Chemical Extraction Process technology to re-refine used oil into marine fuel cutterstock and a higher-value feedstock for further processing. KMTEX uses industry standard processing technologies to re-refine the Company’s feedstocks into pygas, gasoline blendstock and marine fuel cutterstock.
Currently, Vertex provides their services in 13 states, primarily in the Gulf Coast and Central Midwest regions of the U. S. During the twelve month period ending December 31, 2011, the Company aggregated approximately 48.6 million gallons of used motor oil and other petroleum by-product feedstocks and managed the re-refining of approximately 22.1 million gallons of used motor oil with our proprietary licensed TCEP process and through their third party processing agreement.
Biomass Renewable Energy
Vertex Energy is also continuing to work on joint development commercial projects which focus on the separation of municipal solid waste into feedstocks for energy production. The Company is very selective in choosing opportunities that they believe will result in value for the shareholders of Vertex.
VTNR Update: May 08, 2012 06:52 AM Eastern Daylight Time
Financial highlights for Q1 2012 include:
• Revenue increased 71% to $34.8 million for the first quarter of 2012 versus $20.3 million in Q1 2011;
• Gross profit for the quarter increased to $2.89 million, a 27% increase over the $2.27 million reported in the same period last year;
• Income from operations improved 36% to $1.69 million, compared with $1.24 million reported during the first quarter of last year;
• Net income for the first quarter of 2012 improved to $1.57 million or $0.10 per fully diluted share, compared with net income of $1.2 million or $0.09 per fully diluted share in Q1 2011. This represents a 32% increase in net income; and
• Company-wide sales volumes increased 36% in Q1 2012 versus Q1 2011
Bottom Line: VTNR is the first penny stock that everyone who reads this should buy when the market opens. OTC, NYSE, Nasdaq, Nikkei, wherever you look, that growth pattern partnered up with that small of a float is not going to happen again unless you read 10-Q’s to your kids at bed time for the next 30 years.
To read these remarkable SEC filings of VTNR, click here.
Niche Market, Growth, Small Float, Superlative Price/Sales and Price/Book Ratios; What else do you want? Someone to bring you a beer? Add VTNR to your list of penny stocks that you watch and wish you had the courage to buy when they become the Waste Management (NYSE: WM) of recycled oil.