Posts for Ticker ‘ethanol’

Advanced Batteries: The Next Ethanol? (ALTI, ACPW, BCON, XIDE, ENS, CHP, AXPW)

There’s a fair amount of interest from green energy market watchers in the battery market. Many see this as the next big thing for energy investors.  There are allowances for advanced battery technologies in the new stimulus package.  Some of the companies involved in this are established players and some are very speculative.

Some of the companies we have looked at in this sector are Altair Nanotechnologies (NASDAQ:ALTI), privately held A123 Systems Inc., Active Power Inc. (NASDAQ:ACPW), Beacon Power Corporation (NASDAQ:BCON), Exide Technologies (NASDAQ:XIDE), EnerSys (NYSE:ENS), C&D Technologies Inc. (NYSE:CHP), and Axion Power International, Inc. (OTCBB:AXPW).
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Posted on: February 13, 2009 – 12:02 pm in Alternative Energy, Consumer Electronics, Cult Stock, Nanotech, Technology Companies, Utilities, , , , , , , , , , , , , , , , , , , , ,

Valero’s Ethanol Dreams Via VeraSun Refineries (VLO, VSE)

Valero Energy Corp. (NYSE:VLO) has submitted a “stalking horse” bid for six properties offered by VeraSun Energy Corp. (formerly NYSE:VSE) as part of VeraSun’s bankruptcy sale. All told the six plants have a capacity to refine about 670 million gallons of ethanol annually. Valero’s bid totals about $280 million, about a third of what it probably cost to build the plants.

It’s pretty hard to believe that Valero actually wants to buy these facilities. We’ll know soon, though. Bids for these and other VeraSun properties are due March 13th.

Paul Ausick
February 9, 2009

Posted on: February 9, 2009 – 10:18 am in Alternative Energy, Oil & Gas, , , , ,

Jim Cramer’s Play On $16 Corn & Wheat (POT, MOO)

Jim Cramer came out on CNBC’s MAD MONEY tonight, predicting huge gains in agriculture prices and in gold.  Unlike Basketball’s March Madness and a "Sweet 16" his "sweet 16" targets all revolve around "$16" for the commodity.  Cramer said he is making some key changes to some of his stocks picks in each of these sectors.

His first theme is agriculture.  He thinks agriculture is being thrown through the roof because of ethanol.  Cramer thinks that corn goes $16 and wheat goes to $16.  He has been very positive on this one over and over and here were his last picks.  He wants to switch gears and you should go into Potash of Saskatchewan (NYSE: POT) because of severe pricing power.  He loves the high barriers to entry and lack of competition.  We also had a recent IPO get filed in this sector.  He noted that consensus estimates are 107% in 2008, and with a fair earnings multiple that stock could see significantly higher prices.  If you are still unsure about picking individual stocks in this sector, we would note that you can look at the ETF for the agriculture play that is the Market Vectors Global Agribusiness ETF (AMEX: MOO).

Cramer is also talking up some new picks he has for gold and also in higher gas prices. 

Jon C. Ogg
March 3, 2008

Posted on: March 3, 2008 – 6:31 pm in Agriculture, Cramer, , , , , , ,

Ethanol Downgrades Keep Coming (AVR, PEIX, VSE)

If you watch our daily hits on stocks that are hitting 52-week lows, then you know by now that ethanol stocks get kicked almost daily.  Today is no different as Goldman Sachs has cut earnings estimates out of three usual suspects on corn-based ethanol and now projects some actual EPS losses instead of positive earnings in 2008.

  • Aventine Renewable (AVR) current year cut from $0.95 EPS to $0.76 EPS; next year cut from $0.55 EPS down to -$0.15 EPS.
  • Pacific Ethanol (PEIX) current year cut from $0.16 EPS to $0.05; next year cut from $0.35 EPS to -$0.35.
  • Verasun (VSE) current year cut from $0.46 EPS to $0.35; next year cut from $0.70 EPS to $0.15 EPS.

The cut estimates reflects a continued cautious rating on the sector as Goldman Sachs believes a long anticipated oversupply has arrived.  They note that ethanol capacity growth needs to come to a halt and existing capacity needs to run at lower utilization rates.

Goldman Sachs says its earnings projections are now significantly under First Call estimates.  Does that mean even more downgrades on the way from other research firms that have already cut them?  We have had a serious concern for some time about corn-based ethanol in the US.  Other ethanol is profitable elsewhere and without the subsidy this sub-sector of the industry would likely have some viability issues.  This is also a very political topic and the argument could be tossed up that if Iowa primaries weren’t so important that this would be deemed as snake oil.

Articles of interest:

Jon C. Ogg
September 27, 2007

Posted on: September 27, 2007 – 7:36 am in Alternative Energy, Analyst Calls, Oil & Gas, , , , , ,

Some Ethanol Names Drowning In Their Own Tanks (USBE, PEIX, VSE, AVR)

Some of these ethanol stocks are almost becoming permanent members on the list of 52-week lows.  Some of these were major hi-flyers that went to flying under the radar to merely being hitchhikers.

Pacific Ethanol (NASDAQ:PEIX) is trading down 6% at $9.30, well under the $9.73 close.

US BioEnergy (NASDAQ:USBE) hit $9.09, under the old $9.14 lows but stock is currently just above old low.

Verasun Energy (NYSE:VSE) hit $10.95 today, under the old $11.00 low but stock has recovered almost 2%.  Shares are still down close to 3%.

The issue here is not the relative cost to oil with oil over $80.00 per barrel.  We are not alone in this assessment, obviously with these hitting 52-week lows almost more frequently than they don’t, but there are some serious questions about the validity of ethanol as a business in the manner it is being done today.  Ethanol itself is not bad, but without the government subsidy these companies might not be viable.  In fact, there are some that even argue that ethanol in a "purely on its own" model is not even worth the "pollution savings" because of the energy that has to be used to make it and to transport it.  That is even before the corrosive arguments com into play.

When these how up daily on the 52-week lows it begins to feel like they are being overly picked on.  But 2008 is an election year, and ethanol is arguably somewhat of a political issue.

Jon C. Ogg
September 24, 2007

Posted on: September 24, 2007 – 12:17 pm in Alternative Energy, , , , , ,

Ethanol Stocks Get Another Downgrade (AVR, PEIX, VSE)

If you have been following our posts for 52-week lows at the end of the day, one of the groups that keeps having some of its components hitting this list is the ETHANOL Stocks.  With oil over $80.00 it will make you wonder.  This morning FBR Capital Markets, of Friedman, Billings, Ramsey has downgraded some of the ethanol stocks today:

Aventine Renewable Energy (NYSE:AVR) was cut to Underperform. Closed at $11.68; 52-week range $10.61 to $26.49.
Pacific Ethanol (NASDAQ:PEIX) was cut to Underperform. Closed at $11.17; 52-week range $10.29 to $19.80.
Verasun Energy (NYSE:VSE) was cut to Mkt Perform. Closed at $12.02; 52-week range $11.00 to $26.90.

This follows another sector downgrade from Soleil just on Monday September 17.  We have maintained that Ethanol in the manner the current system is set up is not all that economical and not as green on a net-net basis as it is intended to be, and this business got more crowded than it might have because of government subsidies.  This is also a political issue and 2008 may be another volatile year for ethanol.

Jon C. Ogg
September 20, 2007

Posted on: September 20, 2007 – 6:54 am in Alternative Energy, Analyst Calls, , , , , , , ,

Aventine Stands Alone In Ethanol on 52-Week Lows (AVR, PEIX, VSE, USBE)

Aventine Renewable Energy Holdings, Inc (NYSE:AVR) is one of the names that seems to show up on the list of 52-week lows more often than it doesn’t.  Today is a repeat of that instance.  Aventine shares were downgraded at Soleil today pre-market from "Buy" to "Hold" and shares are down almost 4% today at $10.85,  The trading range today is $10.61 to $11.25 and the trading range over the last 52-weeks is $11.20 to $26.49.

The company is one of the fuel-grade ethanol producers in the U.S., and it shows up on the 52-week lows list as frequently as Pacific Ethanol Inc. (NASDAQ:PEIX).  The key difference is Aventine would fit the bill of many value screens based on its P/E ratio.  Pacific Ethanol would not because its profitability is so much lower.  But Aventine is expected to have a decline in earnings in 2008, so its "value term" may be somewhat voided out.

Soleil also downgraded VeraSun (NYSE:VSE) and US BioEnergy Corp. (NASDAQ:USBE) to "Sell" from "Hold" pre-market, but those shares are actually up on the day along with Pacific Ethanol.

While legislation is expected that may boost prices, ethanol is quite apolitical situation right now and man are on both sides of the argumentif ethanol as an industry in its state in the U.S. right now is profitable without a government subsidy and even if it is environmentally sound or helping in dependence on foreign oil.  With 2008 being an election year and with Iowa out of the way early on, ethanol (and the stocks that live off it) may see even more volatility in 2008.

Jon C. Ogg is a partner in 24/7 Wall St.; he does not own securities in the companies he covers.

Posted on: September 18, 2007 – 12:45 pm in Alternative Energy, , , , , , ,

VeraSun (VSE), BioFuel Energy (BIOF): More Corn To The Rescue

Several recent ethanol IPOs have had a tough time as concerns mount that a lack of corn supply could drive their cost of revenue up. The four companies the represent most of the money taken in from the capital markets recently are BioFuel Energy (BIOF), U.S. BioEnergy (USBE), VeraSun (VSE), and Aventine Renewable Energy (AVR). They may be about to get a hand.

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

Posted on: June 30, 2007 – 6:33 pm in Uncategorized, , , , , , ,