Rentech, Inc. (NYSE:RTK) a provider of clean energy solutions, closed
at $2.00 last Friday, posting a 7.5% gain for the week. Since the start
of the year, the stock has risen by 51.5%. (In fact, Rentech has been
on an upward trajectory since bottoming out at $0.75 in early October
2011.)
Last Friday, the company announced its financial performance for the
three months ending 31 December 2011, reporting a consolidated net loss
of $8.5 million or $0.04 per share. This was in contrast to a net loss
of $5.5 million or $0.02 per share in the same period in 2010.
(Rentech's financial results reflect the consolidated results of its
alternative energy business and those of Rentech Nitrogen, of which it
is a majority shareholder.) On the other hand, its revenues for the
latest quarter reached $63.07 million, an improvement over the previous
year's $43.01 million. According to Rentech, its revenues were derived
almost entirely from the sales of nitrogen fertilizer products, whose
sales prices were higher due to low levels of grain and fertilizer
inventories and expectations of higher corn acreage this year.
Rentech appears to be in a sound financial position. Given its unique
use of biomass gasification processes to convert biomass feed stocks
into synthesis gas for producing renewable fuels, the company has
created an attractive market niche for itself. The company reported that
as of 31 December 2011, it had consolidated cash of $237.5 million, of
which $44.8 million was held at Rentech Nitrogen. The company also
recently announced its plan to repurchase up to $25 million of common
stock. (The plan is expected to be implemented on or about 20 March.) It
also reiterated its commitment to cut its operating expenses. Last
month, the company announced that Rentech Nitrogen had fully repaid the
bridge loan for interim funding of the ammonia capacity and storage
expansion project at the latter's fertilizer facility.
In view of the above, analysts remain sanguine about the company's
prospects this year. Stockbroker Feltl & Co. recently rated the
company a "strong buy".