More bad news for ethanol…VeraSun Energy has suspended production at 3 of its distilleries: Bloomingberg, Albion and Ohio. The plants stopped running in the latter part of December, with the company citing higher corn costs and less demand from ethanol as the reasons behind the closure.
Justice Sirikah over at HotStocked.com notes that this isn’t the first time this has happened:
… Read the restThis is the second time that VeraSun has taken such an extreme measure since
I first wrote about the absurdity of ethanol in an article a couple years ago at Self Investors titled “Unintended Consequences of the Ethanol Boom“, highlighting food inflation, environmental destruction and the disgusting politicking surrounding it. With a surge of companies all attempting to cash in on ethanol with IPOs, it was just a matter of time before a few of them went belly up. One of the largest ethanol producers around, VeraSun … Read the rest
The stock price of troubled VeraSun Energy got a boost on Friday, when Invesco, an investment firm based in Bermuda, announced that it had purchased 15.88 million shares of VeraSun stock.
VeraSun stock prices ended the day on Friday at $1.90/share, an increase of 10%.
One of the largest producers of ethanol in the US, VeraSun’s earnings have suffered due to high corn prices. The value of the stock plummeted in September, when the … Read the rest
American Technology Research Reinstated coverage today on a few alternative energy plays during the trading day today:
* Aventine Renewable (AVR) with a Neutral rating and price target of $3
* VeraSun (VSE) with a Neutral rating and price target of $2.25
* Fuel Systems Solutions (FSYS) get a Buy rating and a price target of $45 (it’s getting interesting down here, but I’d like to see it come back and test the area around … Read the rest
2 upgrades to tell you about this morning – Citi upgraded VeraSun (VSE) from Sell to Hold but lowered the price target from 3 to 1.85, saying “The difficulties in 3Q08 are primarily related to the company’s corn hedging activities as VeraSun chose to lock in significant quantities of corn back in July when the corn market was reaching its peak. Consequently, as corn prices quickly reversed course VeraSun generated large losses on its corn … Read the rest
VeraSun Energy, the troubled ethanol producer, began a public offering of 20,000,000 million shares of its common stock two days ago. It also announced larger-than-expected third quarter losses on Wednesday and saw the price of its shares drop precipitously as a result. Now, the company has announced that it is suspending that equity offer, and it has retained the firm Morgan Stanley to act as advisors and help the firm evaluate alternate courses of action. … Read the rest
According to StreetInsider.com, Soleil Securities raised its price target on VeraSun (VSE) from 3.75 to 4.15 but maintained its sell rating. Uh OK.. got it. So you think the price will rise from current levels but it should still be sold.
The firm also raised its 08 EPS estimate from .10 to .49 and its 09 estimate from .02 to .41 saying that it now reflects management guidance and the current macro ethanol markets. … Read the rest
Morgan Stanley is out with a note today stating that VeraSun Energy (VSE) beat consensus and their Q2 estimates by a wide margin yet they still rate the stock equal weight due to the "tough ethanol market." That being said Morgan Stanley believes VSE has the best risk reward profile among the pure play ethanol producers.
Morgan Stanley also reported, "Given our outlook for increased industry capacity and a challenging cost profile we recommend investors … Read the rest
James Altucher of TheStreet.com posted an article this morning highlighting 6 alternative energy stocks that could go to zero. He likens the green stock mania to the dot com bubble and to some degree he’s right. There is one important lesson in all of this: stick to companies growing rapidly and decreasing debt with strong technical indicators and you won’t get burned. Simple as that.
The six he highlighted are :
Verasun (VSE), Capstone … Read the rest
UBS upgraded two ethanol plays this morning – Aventine Renewable Energies (AVR) & VeraSun Energy (VSE) to buy ratings saying the recent drop in corn prices along with healthy ethanol prices have created a positive margin scenario and that legislative support for corn based ethanol will be a positive for ethanol names in the short term
AVR is currently up about 10% and has cleared the 50 day moving average in recent days but remains … Read the rest