More Good News From the Ethanol SectorThe Andersons (ANDE) doubled the Street’s expectations with 88 cents in fourth-quarter earnings per share. Ohio-based ethanol player The Andersons surprised analysts with $16.2 million or 88 cents a share in fourth-quarter net income. The performance was a major improvement over the same period last year, during which the company lost -$33.4 million or -$1.84 per share. Revenue was also up, to $916 million from $770 in Q4 2008. CEO Mike Anderson said, “The significant turn around in ethanol margins enabled our ethanol business to report its best ever quarterly results,” but he credited the company’s grain business for much of the full-year earnings. As a whole, the Ethanol and Biofuel Stocks Index has outperformed the S&P 500 by 2% over the last month. The sector has been focused on a potential boost in the ethanol content of American gas pumps. Meanwhile, supporting words from the Obama administration have drawn in some speculators. Pacific Ethanol (NADSAQ: PEIX) has trended downward since spiking from less than 80 cents to more than $2.40 in January. The rally was enough to secure its place in the Nasdaq, which requires that securities maintain a minimum closing bid price of $1.00 per share. Electronics retailer turned ethanol investment company REX Stores (RSC) is also among the sector’s top performers over the last month, up by 13%. Meanwhile, Green Plains Renewable Energy (NADSAQ: GPRE), MGP Ingredients (MGPI), and Cosan (CZZ) have all slumped by -8% or more. As of this writing, the Ethanol and Biofuel Stocks Index is just shy of the top-50 tickerspy Indexes over the last month. It will be interesting to see whether the sector can push higher in 2010 amid all the hype surrounding potential competition in the form of electric vehicles. Investors can track the Ethanol and Biofuel Stocks Index for performance trends and a suite of other metrics at tickerspy.com.
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February 9th, 2010 at 10:45 am
Ethanol, is a horrible expensive energy source. It has been around since the early 1900’s and has always been known to be an inefficient, expensive boondoggle of a an alternative. Reject this fuel. The ill monetary effects of ethanol hurt the working class and starve third world poor populations.
February 9th, 2010 at 11:35 am
And those are only the good effects, in addition it corrupts congress even beyond their usuual thresholds. Never has there been such a pure scam.
February 9th, 2010 at 7:39 pm
my nephew’s bertram 28ft.his pride and joy for years was destroyed by ethanol.the gas tank melted away and destroyed both engines.the boat is now a wreck requiring thousands of dollars to repair and he is n just a working class stiff.If you vehicle gives 20mpg think again buddy it now only gets 17mpg.The greatest con job of the enviro terriorists to date.Us fools down on the totem pole of wealth always get stiffed but we will lead the revo to come and wreck the whole rotten system and then everybody will feel the pain
February 10th, 2010 at 12:33 am
No, you guys are wrong. You are so far from the what’s going on you don’t really understand. There is plenty of corn, in fact too much, yes too much. For the midwestern grain farmer to continue to survive he has to meet his expenses to produce each year. In order to get a fair price for the corn, we need to use it for livestock and human consumption, exporting and finally for the ethanol industry. That’s it pure and simple, remember the farmer has to exist with a fair profit. He keeps our food very inexpensive and abundant, especially compared to the rest of the world.
February 10th, 2010 at 10:53 am
Thank you Dick for helping to correct some of the popular misconceptions about Ethanol and corn prices. Even farmers know that eventually corn ethanol will be replaced by another source of biomass(look at GPRE and its algae research). In the meantime, what is wrong with helping to diminish our reliance on foreign oil by using corn? The American Farmer can produce enough to meet demand — in fact right now there is a huge surplus of corn and prices are half of what it was a couple of years ago when Ethanol was taking the blame. There is a problem with land use for agriculture in other parts of the world but not in the U.S.
February 10th, 2010 at 4:35 pm
Additionally, corn used for human consumption is not the same used for corn ethanol production. There is a difference b/w feed-corn and sweet corn. Also, dare we forget the additional products we obtain in the process? Germ, oil, DDG for feed additions (protein source). The problem is too many people with too little understanding of the chemistry. Must be our lovely public ‘edukashun’ I guess. Always looking for a scapegoat.
February 14th, 2010 at 1:49 pm
Yes. thank you for the last three posts. Without trying to sound superior on the subject, as I know many people have more expertise than I, listening to people rant about outdated and stricly false claims is getting old. Two years ago would have been different. I am a senior mechanical engineering student at the university of arkansas with an emphasis on alternative power generation and I have put years of research into the subjects of biofuels and sustainable power. I have also been fortunate enough to have had direct conversations with Dr. Ryan Adolphson, Biomass processing head at the University of Georgia. I have also worked at a boat store as a maintenace mechanic and grew up in my dad’s german car shop in san diego.
As recently pointed out, ethanol is produced from a non food grade corn crop and instead of being in direct competition of our food supply, it competes with corn derivatives such as corn syrup, which should be weened away from. If you would rather pump high fructose corn syrup through your body than ethanol in 10% concentratoin through your CAR engine, you are out of your mind. Which leads to my next point. many two stroke and outboard engines are not compatible wiht regular ethanol use. I am very sorry to hear about your nephew’s boat but this is open information that requires very little effort to dig up and is also the reason why many gas stations near water sources still pump 100% petrol gasoline
February 14th, 2010 at 2:14 pm
And to the first comment. Henry ford actually designed the first model T to run off of ethanol made from peanut oil. Then why not corn you ask? This is partially because international trade of resources was less prevalent at the time and corn has now grown to be our largest crop, which in recent times, provided for the best hope of an another export which we desperately need in this country. Now to blow all the opponents minds. corn ethanol is 1st gen. ethanol. We are currently commercially producing 2nd generation, which is the process of pyrolysis with catalytic or enzymatic conversion. This type of production can allow for localization of fuel sources from corn, to wood chips, to municipal waste. It is many more times efficient than 1st gen. provides many lucrative coproducts and leaves a charcoal that has been shown to increase crop yields by close to 3x by replenishing carbon in the soil. making it in theory carbon negative depending on the source. We are also working on 3rd generation ethanol i.e. from algae. This is the most efficient to date, and is carbon negative. Still a ways off though.
Look we all talk about how there is no silver bullet to energy reform yet everyone still wants to staple our energy on oil. Ethanol provides a much more efficient, cleaner, more sustainable fuel with more local and national economic benefit than you could imagine. Most people that say ethanol is expensive, produces more carbon than it’s worth, and takes more energy than it nets, all go off of outdated and skeptical at best research put out by cornell university and sponsored by SHELL OIL CORP. many years ago. All of their findings have been proven VERY false commercially and theoretically, yet lawmakers such as john mccain continue to recite their numbers. If we drop the ball on ethanol we will prove yet again that our push for energy independence will continue to be trumped by oil. An oil industry that hasn’t built a refiniry in the US since the 1970’s and industry that is purely a price setting industry, and an industry that still continues to devalue the dollar, increase our trade deficit, and still turn out record profits by whoring out our measue of the citizens’ wealth not just the rich. We all need to keep in mind that every industrialized nation’s largest cost is energy and do our part to make sure we know what we are talking about and which avenue provides the best trajectory for energy independence.
February 16th, 2010 at 8:01 pm
Just wanting to make sure that ethanol watchers are aware of Rex Stores (NYSE: RSC) which has built a portfolio of ivestments in six ethanol production plants in the U.S. (and has exited its legacy specialty retail operations).
David Collins
Investor Relations for RSC