Cramer Says Ethanol Stocks Are a Joke (corrected story)

Cramer came out on CNBC’s STOP TRADING segment discussing the ethanol and alternative energy names that have been running up yesterday and today ahead of Bush’s State of the Union tonight.  Cramer said he’d be selling the VeraSun (VSE) and Hoku Scientific (HOKU) and other ethanol big run-ups here.  In his video this morning I alluded to him saying he’d tell people to sell those immediately tomorrow at the open.  Cramer maintains that ethanol stocks might work only if oil is $100 per barrel.  He even said ethanol is a collossal joke that everyone is in on, but it’s a joke that can be played until 9:31 AM.

Here is some conjecture about tonight’s State of the Union:  With the ratings where they are and with the other candidates having already thrown their hats into the ring, this State of the Union speech won’t be as impacting as the others.

Here is a partial list of the others that often trade in the same group: Xethanol (XNL), Aventine Renewable (AVR), Pacific Ethanol (PEIX), US BioEnergy (USBE), Green Plains Renewable (GPRE), MGP Ingredients (MGPI), and The Andersons (ANDE).

Archer Daniels (ADM) and Monsanto (MON) are thought of as the real companies that can win.   Bunge (BG) is rarely mentioned, but BG is the soy maker that directly benefits from biodiesel (which is actually profitable without government subsidies).

Jon C. Ogg
January 23, 2007