The sell-off in Omega Protein (OME -10.5%) accelerates, with losses now in the double-digits. Sidoti cut the shares to Neutral from Buy yesterday. The company says it will report Q2 earnings on August 6. SA contributor LongShort 101, whose previous piece sent the stock reeling, was out last week with an update, noting that Peruvian fish meal prices were falling fast. He also raised concerns about OME's menhaden landings catch.
Omega Protein (OME -12.8%) posts double-digit losses two days after reaching an agreement with the U.S. Attorney's Office to pay a total of $7.5M in fines to resolve issues related to two violations of the Clean Water Act. Perhaps helping to tip sentiment to the downside today is an article from SA contributor LongShort101 who says the company's EBITDA could be cut in half once the depleted supply of Peruvian fish meal recovers.
Omega Protein (OME +15.7%) soars after its earnings beat. Profit margins rose to 24.7% during Q1, up 420bps sequentially and 310bps Y/Y — this was the third straight quarter of consolidated gross margin expansion. Sales of OmegaActiv (concentrated fish oil) grew during the period, underscoring progress in the human nutrition segment, where revenues rose 32% sequentially. On the call, both the company and D.A. Davidson's Timothy Ramey mentioned OmegaActive's SupplySide Insight Award (with Swanson) as evidence of OME's opportunities going forward. (PR, transcript)
The FDA is proposing two new food safety rules for foodborne illness prevention. The first rule would require food makers to develop a formal plan for preventing their food products from causing foodborne illness, and for correcting any problems that might arise. The second proposes enforceable, scientific-based safety standards for the production and harvesting of produce on farms.