Nothing Fishy Here

Good Morning.  Congratulations to the NCAA champion Louisville Cardinals.  It was a great tournament.  It’s a great time to be a U of L fan, with a Sugar Bowl victory over Florida in early January, and an NCAA Men’s basketball championship.  The women’s basketball team plays for the NCAA championship tonight.

Today’s featured stock is Omega Protein Corporation (NYSE – OME - $10.67).  While over $10, it has a market cap of only $212 million, well within the micro-cap space.  Omega is a nutritional ingredient company that produces Omega-3 fish oil and fish meal products.  The Animal Nutrition segment produces animal nutrition products for animal feed, refined fish oil products, dietary supplements, and fish solubles for livestock feed manufacturers and aquaculture feed manufacturers, as well as for use as an organic fertilizer.  The Human Nutrition segment provides compound products, including Omega-3 fish oils; and operates as an ingredient.

OME is up nearly $4 to current levels since the start of the year.  The charts are awesome for the continuation of this great ride, and very bullish in short term analysis.  The Human Nutrition segment business, the fastest growing segment of the company, increased revenues by 44% in 2012 to $23 million.  Company management believes the high growth rate in this segment will continue in 2013.  Additionally, Omega continues to grow organically and through acquisition.   In late February the company bought Wisconsin Specialty Protein, a company that produces a variety of value-added protein ingredients for the food and nutritional supplement industries, including organic and other specialty protein products.

Omega has accounted for a $7.7 million payoff over previous quarters in a settlement with the U.S. government.  This should clear the way to EPS profitability and a short term target of $13.

Have a great day!

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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