Back in December I wrote a very long and detail article of Omega Protein (OME) and I said that this stock was poised for 100% appreciation for 2013 (please consider: Should Fish Oil And Fatty Acids Be Part Of Your Portfolio?).
Since then the stock has performed even better than I expected and today traded above $9, or about 50% higher since late December.
Fourth Quarter and Full Year 2012 Highlights:
Revenues: $63.1 million for the quarter and $235.6 million for the year
Gross profit margin: 20.5% for the quarter and 17.8% for the year
U.S. Attorney investigation charge: Recorded $3.6 million for the quarter and $8.0 million for the year
Net income/loss: Net loss of $0.5 million, or net income of $4.0 million excluding the investigation charge and net loss on disposal of assets, for the quarter, and net income of $4.1 million, or $10.4 million excluding the investigation charge and net gain on disposal of assets, for the year
Earnings: Loss per diluted share of $0.03, or earnings per diluted share of $0.20 excluding the investigation charge and net loss on disposal of assets, for the quarter, and earnings per diluted share of $0.20, or $0.52 excluding the investigation charge and net gain on disposal of assets, for the year
Adjusted EBITDA: $11.6 million for the quarter and $35.6 million for the year
Catalysts going forward:
In February 27 the company acquired Wisconsin Specialty Protein that produces a variety of value-added protein ingredients for the food and nutritional supplement industries, including organic and other specialty protein products. According to the company's latest conference call, the deal was an all cash transaction for $26.5 million subject to adjustments. The business recorded revenues of $11.5 million and revenues grew 17% over 2011 while EBITDA grew 73% from 2011. Bret D. Scholtes President and CEO of the company said "We expect this transaction to be accretive to earnings in 2013". Please note the company has made several acquisitions over the past 2 years all on a cash basis.
The company ended its Fiscal year with $295 million is assets and $90 million in liabilities, with total current assets of $144 million and its total cash increased to $56 million.
The human nutrition segment business, the fastest growing segment of the company, increased revenues by 44% in 2012 to $23 million.
Fish oil prices increased 11% in 2012. On an individual product basis, the company expects to see gradually increasing prices on forward contracts over the next few quarters, as older contracts roll off and newer ones roll on.
The pending settlement between the company and the U.S. government while not signed yet, is estimated to cost around $7.7 million according to the company. The company has taken an additional charge of $3.6 million in the most recent quarter and If I am not mistaken, has accounted for most if not all of the associated expenses with this case.
On a technical note
The stock today has taken out the August high and if it takes out $9.25, I think the next target is around $11. The stock has performed very well and should correct at some point. If it does, any correction will be a buying opportunity.
Please read my original article on the company for a more clear picture of the company and the business.