Last year the EPA approved E15 for use in cars manufactured in 2001 and later, while cars made before that date may only use the 10% ethanol blend (E10). That has caused a problem because there are still so many pre-2001 autos on US roads. And just because the makers have been registered, that doesn’t mean they can sell E15:

E15 was granted conditional waivers to be introduced into commerce for use in model year 2001 and newer light-duty motor vehicles (cars and all but the largest pick-up trucks, vans and SUVs), and the misfueling mitigation conditions of the waiver must be met before E15 can be lawfully sold. Specifically, those fuel and fuel additive manufacturers wishing to sell E15 must obtain EPA approval of, and implement a misfueling mitigation plan and a survey plan before selling E15.

In addition to these restrictions, there are restrictions on E15 in some states as well.

E15 is a completely unnecessary fuel blend. The ethanol industry needed something to make up for the loss of its subsidies, so it persuaded Congress that a 15% ethanol blend would lower pump prices and reduce America’s dependence on imported oil. Neither of those is strictly true. What is true is that the lower energy content of ethanol (about 30% less than gasoline) typically ends up costing drivers at least as much as pure gasoline because they have to buy more of it to get the same mileage. An ethanol blend of 15% just lowers mileage even more.

The full list of EPA-approved ethanol makers is here.

Paul Ausick

The unofficial closing bells put the DJIA down nearly 3 points to12,977.57 (-0.02%), the NASDAQ fell nearly 13 points -0.43%) to 2,976.19, and the S&P 500 fell -0.32% or nearly 4.5 points to 1,369.63.

There were several analyst upgrades and downgrades today, including Travelers Companies (NYSE: TRV) cut to ‘equal weight’ at Morgan Stanley; Lowe’s Companies (NYSE: LOW) raised to ‘equal weight’ at Morgan Stanley; Motorola Solutions Inc. (NYSE: MSI) raised to ‘outperform’ at Credit Suisse; MetroPCS Communications Inc. (NYSE: PCS) maintained as ‘buy’ with $15 target price at Argus; and Monster Worldwide Inc. (NYSE: MWW) cut to ‘neutral’ at UBS.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Big Lots Inc. (NYSE: BIG) is down -4.2% at $42.61; Genesco Inc. (NYSE: GCO) is up 4.2% at $73.58 after posting a new 52-week high of $74.89 earlier today; Biofuel Energy Corp. (NASDAQ: BIOF) is up 5.5% at $0.76; and Einstein Noah Restaurant Group Inc. (NASDAQ: BAGL) is up 3.6% at $14.99.

Here’s our preview of next week’s earnings announcements.

Other standouts from today include the following stocks:

Yelp Inc. (NYSE: YELP) is up nearly 64% at $24.55 following its IPO at $15/share this morning. Move coverage here.

Shutterfly Inc. (NASDAQ: SFLY) is up 16% at $31.22. The social networking company has struck a deal with Eastman Kodak Co. (EKDKQ) to provide a stalking-horse bid for some of Kodak’s assets. More coverage here.

Vringo Inc. (AMEX: VRNG) is up more than 13% at $1.63. The social network app maker is probably getting a bump from the success of Yelp’s IPO.

U.S. Auto Parts Network Inc. (NASDAQ: PRTS) is down more than -19% at $4.00. The retail parts auto parts distributor missed consensus estimates last night.

Overstock.com Inc. (NASDAQ: OSTK) is down more than -11% at $6.11 after posting a new 52-week low of $5.89 earlier this morning. The online discounter posted an unexpectedly quarterly loss this morning.

Stay tuned for Monday. We have noted the following events on the schedule (all times Eastern):

• 10:00 a.m. – Factory orders
• 10:00 a.m. – ISM non-manufacturing index
• 11:30 a.m. – 3- and 6-month Treasury bill auction

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Paul Ausick

Alvarion Ltd. (NASDAQ: ALVR) is soaring this morning after winning a 4G network pact in Canada.  Shares are up over 22% at $2.31 and volume is close to 1 million shares in the pre-market.

Ambac Financial Group, Inc. (NYSE: ABK) had a huge gain yesterday and this morning is a session of giving a little back to the market gods.  Shares are down 4% at $0.75 on about 300,000 shares.

BioFuel Energy Corp. (NASDAQ: BIOF) is trading up again on E15 hopes and shares are up another 8.8% at $3.08 on almost 200,000 shares pre-market.

First Solar, Inc. (NASDAQ: FSLR) announced last night that it was raising its MW guidance for 2011 based upon new additional contracts signed with existing customers.  Shares are up 2.4% at $142.00 but volume is still rather light.

Immucor, Inc. (NASDAQ: BLUD) lowered its guidance and shares are trading lower by 17.7% at $16.81 and volume is approaching 50,000 shares.

InterMune, Inc. (NASDAQ: ITMN) is on the rise
Shares are trading up 10.4% at $14.85 on close to 200,000 pre-market shares.

Invesco Mortgage Capital Inc. (NYSE: IVR) is down after disclosing a sale of 8.5 million shares in a secondary offering.  Shares are down 4.35 at $20.86.

JA Solar Holdings Co., Ltd. (NASDAQ: JASO) is higher after another signed contract last night was announced; shares are up 2% at $9.13 but volume is still rather light for a ‘news event’ trading day.

PepsiCo inc. (NYSE: PEP) is not your normal mover each morning but its earnings came in ahead with guidance that appears to be shy of expectations.  Shares are down 2.65% at $66.30, but the stock had been lower by more than 3% a few minutes earlier.

Allied Irish Banks plc (NYSE: AIB) is down almost 4% at $1.23 at a new 52-week low despite the M&T share sale.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

The Bank of Ireland (NYSE: IRE) is trading up 4.6% at $3.86 while Allied Irish Banks plc (NYSE: AIB) is trading down almost 4% at $1.29 after Fitch ratings downgraded Ireland today.

BioFuel Energy Corp. (NASDAQ: BIOF) is trading up 4% at $2.50 on almost 50,000 shares, likely on more hopes of approval on E15… Keep in mind that this ran to $2.40 from $1.95 yesterday and the market cap before this morning’s pop up was $61 million.

Costco Wholesale (NASDAQ: COST) beat earnings but the run up had already factored much of that move into the shares.  The stock is down 2% at $63.40 on active volume; shares had been under $54 as recently as late-July.

Equinix, Inc. (NASDAQ: EQIX) is getting crushed as shares are down nearly 25% at $79.65 on active trading after it slashed Q3 and 2010 guidance; at least two downgrades have also been seen.

JA Solar Holdings, Co., Ltd. (NASDAQ: JASO) is trading up 6% at $8.80 after a supply agreement with BP Solar was announced.  Shares are up about 6% at $8.80 in active trading.

Monsanto Co. (NYSE: MON) is recovering slightly after earnings despite a slightly weaker report and despite guidance for 2011 being a tad softer than expectations.  Much of the news was priced in as this one got killed.  Shares are trading up 1.8% at $49.40 on active trading volume.

T-3 Energy Services Inc. (NASDAQ: TTES), which is into products used in the drilling and completion of new oil and gas wells, is HALTED PENDING NEWS.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

• Biofuel Energy (BIOF) Raised to Hold at Citigroup.
• CSX Corp. (CSX) Raised to Buy at UBS.
• Community Health Systems (CYH) Started as Outperform at Baird.
• Psychiatric Solutions (PSYS) Started as Outperform at Baird.
• Solera Holdings (SLH) Started as Buy at SunTrust.
• Universal Health Services UHS) started as Outperform at Baird.

Jon C. Ogg
August 14, 2008

Hydrogen fuel cell start-up HydroGen (NASDAQ: HYDG) tops the list withdrop of nearly 96%, from a 52-week high of $3.94 to $0.14. The companyis developing a 400-kW phosphoric acid fuel cell, and is burning cashat the rate of nearly $2 million a month. The NASDAQ exchange haswarned the company of possible delisting by January 1, 2009, unless itcan bring its share price up to the minimum $1/share. The company laidoff approximately 64% of its Ohio workforce in May, but even that isnot likely to help for long.

Nova Biosource Fuels (AMEX:NBF) has dropped more than 89%, from a highof $3.10 to $0.28. Nova is building distilleries to make biodiesel froma wide variety of feedstocks, such as soybean oil, pork fat, and beeftallow. The company’s problems stem from a shortage of working capital,a shortage of feedstocks, and higher prices for the feedstock that isavailable. The company needs to complete a demonstration project by theend of September in order to meet the terms of one of its creditagreements. That looks to be a formidable challenge.

Ethanol stocks are also taking a beating. BioFuel Energy (NASDAQ:BIOF)has fallen from a high of $8.40 to $0.90. It establisheda new low yesterday, brought on by its announcement that it does nothave the cash to meet a $26 million hedging loss. The company is hopingto persuade Cargill to agree to a payment schedule that BioFuel canmeet. This does not look good. 

Another player in the sector is Pacific Ethanol (NASDAQ: PEIX), which garnered much attention in recent years as Bill Gates was once a massive stakeholder.  He’s been a seller but he probably wishes he would have unloaded it all long ago.  Its recent earnings didn’t add any love and shares are down close to $2.00 with a 52-week range of $1.45 to $12.80.  In 2006 this was trading over $30.00, so it is a serial disappointment.

Xethanol (AMEX:XNL) is down almost 64% in the past 52 weeks, from ahigh of $1.20 to its current $0.49. The news is even worse when yourecall that the stock hit an all-time high of around $15 about 2 yearsago. Fears that the federal subsidy will be eliminated or reduced orthat Brazil will begin exporting ethanol to the US have not improvedthe outlook for any ethanol producer. Add in higher corn prices, andthe recipe doesn’t look too appetizing.

The unproven alt-energy companies, like HydroGen and Nove Biosource,face financing problems in the tight capital markets. The establishedtechnologies, like ethanol, face weakening prices, higher costs,relatively low barriers to entry, and have an embedded social/politicalput option in them. The alt-energy arena is searching for a place and away to make money in difficult times for everybody.

Paul Ausick
August 13, 2008

Over the last week and a half the flooding has caused irreparable damage to this year’s corn market.  Corn prices have risen and are likely to destroy margins despite the subsidy. Cash costs are running above sell-through rates for small and mid-sized producers and Citi even believes some may be  forced to shut down over the coming months. 

Jon C. Ogg
June 12, 2008

According to CNNMoney, American farmers are ready to grow their biggest corn crop ever, an astonishing 12.8 billion bushels. The ethanol industry will need it. CNN figures say "ethanol production is forecast to double by the end of 2008 to more than 13 billion gallons."

Fear of lack of corn has hammered stock prices. VeraSun hit $30 a bit over a year ago. It now trades at about $14. Shares of the company and its peers have recovered slightly. Part of this is due to a the House of Representatives beginning to amending an energy bill expected to call for greater use of alternative fuels. But, that is could comfort if the cost or materials stays high.

VeraSun’s revenue has been fairly flat for the last three reported quarters, at around about $145 million. But cost of revenue has gone up from $88 million in the September 2006 quarter to $135 million in the March 2007 quarter.

That trend may finally move into reverse.

Douglas A. McIntyre

Jon C. Ogg
June 14, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.