Is the ethanol industry ready to soar?
Today's Financial News - Posted December 1, 2009
The ethanol industry is not a headline maker, but it is making investors plenty of money. How do 1,500% gains sound?
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): The ethanol industry is having yet another good day. After near political abandonment, the nation’s biofuel sector reeled from the pain of a wave of bankruptcy filings earlier this year.
But now, thanks to some more political maneuvering the industry is once again finding itself on the leader board.
Should you get used to it?
Before we answer that question, let’s look at the catalyst for the action. Today was supposed to be the EPA’s deadline for a decision that would allow gasoline blends to contain up to 15% ethanol versus the 10% cap now in place.
But word this morning says the EPA is not ready to make its decision quite yet. It now wants to make the decision by sometime next summer. Judging by the day’s pricing action, the Street views this as a positive sign.
Companies across the industry are eager to push more of their product into the nation’s fuel source.
One of the big winners today is Pacific Ethanol (NASDAQ:PEIX), the once highly touted California-based producer with subsidiaries in and out of bankruptcy court over the past year.
Word that more ethanol production may be around the corner was enough for the company to pull the mothballs out of its Burley, Idaho production facility by January. The company owns a total of four production facilities, only one of which is currently operating.
If the word from the EPA is positive, expect shares to continue to climb. As I write, traders are getting in (and out) at $0.87, up 56% on the day.
Not a solo player
Two more companies worth mentioning are Green Plains Renewable Energy (NASDAQ:GPRE) and BioFuel Energy (NASDAQ:BIOF). Thanks to today’s action, shares of the two ethanol producers are up by 12% and 22%, respectively.
Today’s action, while eye-catching, is nothing out of the ordinary for this industry. Just look at Green Plains’ movement over the past nine months.
In March, like most stocks, the company’s valuation struck a new low of $1.12. Today, those same shares are trading for $12.90, a gain of 1,050%.
While adding another $11 to share price is unlikely, there is plenty of upside left in Green Plains and the ethanol industry. As the economy levels out and variables become certainties, producers will find their optimum scale and maximize their margins and profit potential.
While March would have been the best time to buy, today’s not too bad either.
Next Article: TFN eNews 12/01/2009: This is how the global game of Risk is played!
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December 1st, 2009 at 6:02 pm
What may be even more interesting is that the Bill Gate”s FOUNDATION HAS A PILE OF ETOH SHARES COUPLE THIS WITH HIS TIGHT ASSOCIATION WITH UNCLE WARREN BUFFETT> AND UNCLE BUFFETT HAS PILED BRK>A INTO< AND TAKING OVER BNI
SOMETHING IS UP< Keep in mind that ethanol is not a pipeline shipable product, and guess what, trains, planes and automobiles. Trains can transport it in bulk, and the other 2 burn it. Wah La
THESE KIND OF GUYS DON"T MAKE MANY MISTAKES< NOT TO MENTION THEY CAN MOVE By the way, JUST HOW MUCH SILVER IS UNCLE WARREN STILL HOLDING ?
The CIA
December 2nd, 2009 at 8:16 am
Not bad this shorting Natural Gas.
In my case I could by 1000 Stück from such put options against
the natural gas price, my ditch lays in an other field:
The Bank which I have don’t alow option trades, they have ll this Forex,
CFD’s and other Futures but no option trading. Until I have changed my
account the waggon my be run away..
The next ditch: I can’t pay with credit card and I never want to have such
an instrument, USA is facing a credit card bubble all tell me this, for what’s
sake shall I have such a costly credit card:? I have the PayPal system for to
buy.Can I not pay via a Bank remittance ? But the Bank her tells me that would
cost a lot of money and the worst, if I don’t know the fees from the Bank
which the seller has in USA, he gets less then he will charge me, after
deduction from Banking fees the amount is lower then the price he asked me.
Regard it at a terial to buy after your recommendation, tell me what I have to
give in the order for this trade,a I could bring the order to the Bank here and
tell me your price for the help, with the details to pay on your account in USA
inclusive the fees from your Bank for this remittance.
Best Regards
Guenther Sigel