Value
8.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 7.9 |
| P/S | 10.0 |
| EV/EBITDA | 5.0 |
| Fwd P/E | 9.4 |
| PEG | 10.0 |
- ▸Forward P/E: 9.3x
- ▸PEG: 0.14
- ▸Attractively valued
ALTO · Why this verdict
Why Alto Ingredients (ALTO) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score6.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock clears both the momentum gate at 6.9 and the asymmetry gate at 2.8x cleanly with no failed gates, in a golden-cross breakout setup. Engine gate (passed) | Both momentum and asymmetry should stay above their respective thresholds for the breakout to remain confirmed. | →Stable |
| CounterSpecialty chemical names tied to commodity input costs can reverse breakouts quickly if feedstock prices move against them. | ||
At a 9.1x forward P/E and 0.14 PEG, the stock screens attractively cheap relative to industry peers. Peer-rank breakdown | The valuation discount to peers should narrow if the market recognizes the relative value. | →Stable |
| CounterA persistent discount to peers may reflect structurally lower margins or a smaller scale rather than a temporary mispricing. | ||
Insiders have been modestly net buyers, roughly $114,450 or 0.027% of market cap, a bullish signal despite its small size. Insider breakdown | Insider buying should continue or at least not reverse to net selling for the bullish signal to hold. | →Stable |
| CounterA 0.027% insider purchase is small enough that it may not represent a meaningful conviction signal from management. | ||
The engine flags earnings quality red on cash conversion at 23% of net income even though the Piotroski score is a strong 7/9. Quality breakdown | Free cash flow to net income should rise well above the current 23% for the earnings-quality flag to clear. | →Stable |
| CounterA strong 7/9 Piotroski score suggests the balance sheet is otherwise healthy despite the weaker cash-conversion ratio. | ||
The stock clears both the momentum gate at 6.9 and the asymmetry gate at 2.8x cleanly with no failed gates, in a golden-cross breakout setup.
→StableEngine gate (passed)
- Expectation
- Both momentum and asymmetry should stay above their respective thresholds for the breakout to remain confirmed.
CounterSpecialty chemical names tied to commodity input costs can reverse breakouts quickly if feedstock prices move against them.
At a 9.1x forward P/E and 0.14 PEG, the stock screens attractively cheap relative to industry peers.
→StablePeer-rank breakdown
- Expectation
- The valuation discount to peers should narrow if the market recognizes the relative value.
CounterA persistent discount to peers may reflect structurally lower margins or a smaller scale rather than a temporary mispricing.
Insiders have been modestly net buyers, roughly $114,450 or 0.027% of market cap, a bullish signal despite its small size.
→StableInsider breakdown
- Expectation
- Insider buying should continue or at least not reverse to net selling for the bullish signal to hold.
CounterA 0.027% insider purchase is small enough that it may not represent a meaningful conviction signal from management.
The engine flags earnings quality red on cash conversion at 23% of net income even though the Piotroski score is a strong 7/9.
→StableQuality breakdown
- Expectation
- Free cash flow to net income should rise well above the current 23% for the earnings-quality flag to clear.
CounterA strong 7/9 Piotroski score suggests the balance sheet is otherwise healthy despite the weaker cash-conversion ratio.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Alto Ingredients clears both the momentum and asymmetry gates cleanly in a golden-cross breakout, trades cheap versus peers, and shows modest insider buying, but a red-flagged earnings-quality metric of 23% FCF to net income tempers the otherwise clean technical and value setup.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.2 |
| ROA | 2.0 |
| Gross margin | 0.0 |
| Op margin | 0.4 |
| Net margin | 1.6 |
| Current ratio | 9.2 |
| FCF quality | 1.9 |
| Moat | 4.4 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: 23% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
6.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.3 |
| EPS growth | 10.0 |
- ▸Declining revenue: -1%
Momentum
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 7.5 |
| OBV | 5.4 |
| MA position | 9.0 |
| Volume | 2.1 |
- ▸Overbought (RSI 70)
- ▸Above 200-day MA
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.4 |
| Price target | 9.6 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (2.0) — signal dampened
- ▸Analyst upside: 54%
Insider
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 6.5 |
| insider conviction | 8.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Modest insider buying — $114,450 (0.026% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.8 |
| quality rank | 4.6 |
| growth rank | 2.0 |
- ▸Attractive P/E vs peers
- ▸Conservative debt levels
Technical
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.8 |
| support resistance | 2.2 |
| 52w position | 9.1 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.5 |
| days to cover | 10.0 |
| volatility | 0.0 |
| put call | 2.4 |
| implied vol | 0.0 |
| beta | 10.0 |
| debt equity | 8.5 |
- ▸Elevated put/call: 1.64
- ▸High IV: 87%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:5.7>=5.5
- ASYMMETRY:2.1>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
2.08
Upside
+31.2%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.4B) below institutional reach
SuitabilityAggressive — MCap $0.4B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 8.9 could not lift the engine output above the verdict floor.
The strongest dimensions are Value at 8.9, Insider at 7.9, and Sentiment at 7.1; the weakest are Quality at 3.5, Technical at 4.4, and Risk (lower is worse) at 5.6. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 2.08 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Clean Breakout Passed Asymmetry
Trip ifAsymmetry ratio falls below 1.5 from the current 2.79.
- P2Cheap Valuation Vs Peers
Trip ifPEG ratio rises above 1.0 from the current 0.14.
- P3Insider Buying Signal
Trip ifInsider transactions flip to net selling of more than $100,000 over the next 90 days.
- P4Earnings Quality Red Flag
Trip ifFree cash flow to net income ratio rises above 70% from the current 23%.