Tag - MGPI

AGP Ingredients Inc (Nasdaq:MGPI),  Synta Pharmacreuticals (Nasdaq:SNTA), DNB Financial Corp (Nasdaq:DNBF) and Hong Kong HighPower Technology (Nasdaq:HPJ) are among the biggest percentage losers in Tuesday's trading among companies with market capitalizations under $1 billion.

 

Also included among the results: China Agritech Inc (Nasdaq:), China AutoMotive Sys Inc (Nasdaq:CAAS), Frequency Electronics Inc (Nasdaq:FEIM), Volt Information Sciences (Nasdaq:VOL) and Putnam Master Inter (Nasdaq:PIM).

MGP Ingredients Inc. (NYSE:MGPI), Patrick Industries Inc. (NYSE:PATK) and Monroe Bancorp (Nasdaq:MROE) are among the biggest percentage losers in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Concurrent Computer Corp. (AMEX:CCUR), FBR Capital Markets Corp. (Nasdaq:FBCM), Ohio Valley Banc Corp. (Nasdaq:OVBC), Northrim BanCorp Inc. (Nasdaq:NRIM), Red Robin Gourmet Burgers Inc (Nasdaq:RRGB) and Chase Corp. (Nasdaq:CCF).

Here are the biggest percentage losers among small caps:

The Russell 2000 (NYSE: IWM) futures are down and the small-cap index will open lower on news a larger-than-expected decline in durable goods orders.

The U.S. Census Bureau reported that orders for durable goods fell 5.3% in January to a seasonally adjusted level of $212.80 billion. Economists were expecting to see a 4% decline following a downwardly revised increase of 4.4% in December.

Durable goods are goods designed to last at least three years.

The Russell 2000 showed that Monday’s rise was no fluke after putting in another solid performance Tuesday, rising 6.86, or 0.97% to 717.32. The rally stalled in the shadow of a little double top reversal from Feb. 14, and that test marks the primary zone to watch heading toward the more dynamic double top at 731.

It will be interesting to see if the Russell 2000 can sustain the positive momentum through this morning’s data – particularly the testimony by Federal Reserve Chairman Ben Bernanke, which will begin to hit the newswires around 10:00 a.m. ET. Look for resistance Wednesday at 723 and 731, with support at 712, 702 and 694.

John Reese is founder and CEO of Validea.com and Validea Capital Management. His Validea newsletter uses a fascinating approach to stock selection. He screen stocks based on the investment criteria of the market’s most legendary investors.

In a recent special report on food stocks – and based on the strategies of Peter Lynch and James O'Shaughnessy -- the advisor has uncovered a trio of small-cap stocks: Village Supermarket Inc. (Nasdaq: VLGEA), MGP Ingredients Inc. (Nasdaq: MGPI) and Seneca Foods Corp. (Nasdaq: SENEA).

Reese explains, “Everybody eats. Sure, it sounds obvious, but it's the kind of thing that's important to remember when investing--particularly if you're still a little leery of where the economy's heading.”

“While people may hold off on buying new homes or cars or clothes when times get tough, the vast majority of us still head to the grocery store every week or so to buy food.

“Grocers, and the companies that supply them and other large-scale food operations, thus make for nice, reliable investments that are less subject to the waxing and waning of the economy than many other firms.”

In line with his overall bullish outlook on the food sector, Reese ran his screens, each of which, he notes, is based on the philosophy of a different Wall Street great. The stocks that pass this test, he suggests, are “good bets even if the economy heads south.”

“While larger grocer chains get more headlines, Village Supermarkets gets better reviews from my guru models,” Reese says.

Commodity, low-tech businesses usually lack investment fizz, unless that business is somehow tethered to the Utopian world of alternative energy.

One tethered energy source, ethanol, is responsible for more fizz than any other thanks to politicians left and right, environmentalists and sundry rent seekers chatting it up as the most expedient solution to the putative energy-independence conundrum.

The chat is backed by more than rhetoric: it’s backed by legislative muscle. The Energy Policy Act of 2005 requires that at least 4 billion gallons of ethanol and biodiesel be used in 2006, increasing up to at least 7.5 billion gallons in 2012, with an annual increase of approximately 700 million gallons each year. More recent legislation passed by the Senate (but not the House) amps ethanol usage to 8.5 billion gallons in 2008 and 13 billion gallons in 2012.

What’s more, the legislation is heavily slanted in favor of the home team. Imported ethanol is subject to two duties: (1) a 2.5% ad valorem tax and (2) a tariff of $0.54 a gallon, rendering imports uncompetitive.

Citing the potential boon from more favorable energy-policy iterations, influential Lehman Brothers analyst Mansi Singhal on August 30 scribed a research note upgrading ethanol producers VeraSun Energy Corp. (NYSE: VSE) and Aventine Renewable Energy Holdings Inc. (NYSE: AVR) to "overweight" from "equal weight” while upgrading the entire sector to "positive" from "neutral.”

Other analysts are less sanguine, expressing concern that increased capacity means increased pricing pressure and margin squeezes down the road. On that front, Bank of America analyst Eric Brown recently predicted that the "relentless supply" of new ethanol production will lead to a 70% contraction in margins by 2009.

Even less sanguine are the free-market economists who believe ethanol economics are a fiction. The sector can’t exist at industrial levels without subsidies and tariffs; therefore, it exists at the whim of elected officials.

Political intervention invariably produces unintended consequences, to be sure. Corn prices have nearly doubled this year, soft-drink manufacturers have struggled to buy corn and corn syrup and environmentalists have fretted over new stresses on America’s farmland. All have powerful lobbyists with access to Congress’s ear and could stymie future pro-ethanol legislation.

That said, a complete 180 is unlikely. Alternative energy supporters have the wind at their back. The ethanol market thrives and money is being made, though who will continue to make money as competition, output and unintended consequences multiply is anyone’s guess. For that reason, investors might consider ethanol exposure with less of a California-gold-rush tack and more of an established-diversified-company one.

One company fitting the established-diversified mold is MGP Ingredients (Nasdaq: MGPI), a $225-million market-cap based in Atchison, Kan., that tempers its ethanol exposure with specialty and commodity wheat proteins and starches.

Shares of MGP Ingredients, Inc. (Nasdaq: MGPI) have set a new 52-week low following news before the start of trading that the maker of natural grain-based ingredients and distillery products narrowed its fourth-quarter profit and missed Wall Street’s expectations.

The net income for the three months ended July 1 was $1.7 million, or $0.10 per share, while four analysts polled by Thomson Financial were calling for net income of $0.14 per share. During the same quarter of 2006, the Atchison, Kan.-based company reported a profit of $7.4 million, or $0.43 per share.

MGP Ingredients booked revenues of $101.5 million, 8.1% above analysts’ projected sales of $93.9 million and 12.4% more than the $90.3 million the company brought in a year earlier.

“Our distillery profitability continued to be impacted by rising corn prices,” said CEO and chairman Ladd Seaberg.