Gevo, Inc. (NASDAQ:GEVO) Announces New Product

Gevo, Inc. (NASDAQ:GEVO)

Gevo, Inc. (NASDAQ:GEVO) shares were off slightly (-3.4%) after the company jointly announced that Gevo’s proprietary isobutanol technology will now be available for licensing to processors of sugar cane juice and molasses. This announcement came after Praj Industries Ltd’s development work, adapting Gevo, Inc. (NASDAQ:GEVO)’s technology to sugar cane and molasses feedstocks.

Gevo, Inc. (NASDAQ:GEVO)
Two month Daily Candle Graph $GEVO

In the first phase of development, Praj Industries worked with Gevo’s technology using sugar cane and molasses feedstocks, undertaking test-runs to create a commercialized process to juice cane and molasses-based ethanol plants, as licensees of Gevo’s isobutanol technology. Licensing is expected to be focused on Praj plants located in India, South America and South-East Asia, with initial capacity targeted to come on-line between 2019 and 2020.

Pramod Chaudhari, Executive Chairman, Praj, stated, “We are excited to offer this technology to our global customers who stand to benefit from an additional revenue stream from isobutanol. Praj has worked on 750 projects for ethanol plants across 75 countries. This isobutanol platform can be offered as ‘bolt-on’ to an existing ethanol plant or as a greenfield plant. This isobutanol technology is the latest addition to Praj’s diverse product portfolio and reinforces our organization’s leadership in the bioenergy space.”

Isobutanol has several direct applications as a gasoline blendstock or as a specialty chemical solvent, or it can be used as Gevo’s alcohol-to-jet fuel (ATJ) and isooctane. In comparison to other renewable jet fuels, Gevo’s ATJ has the potential to offer the optimal solution in terms of operating cost, capital cost, feedstock availability and scalability.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Why Shares of Gevo, Inc. (NASDAQ:GEVO) Rallied

Gevo, Inc. (NASDAQ:GEVO)

Gevo, Inc. (NASDAQ:GEVO) shares rallied by 17.8% after the Chief Executive Officer, Pat Gruber, reaffirmed the company’s growth prospects amidst a changing government landscape and policy initiatives. The executive has also quashed concerns that recent events at the Department of Energy could have a catastrophic impact on the company and the broader BioEconomy.

Gevo, Inc. (NASDAQ:GEVO)
Daily Candle Bar Graph for $GEVO

Luverne Plant Capacity

According to the executive, improving the production capacity of the Luverne plant is a core objective, as focus shifts to targeting the jet fuel, isooctane/renewable gasoline, and isobutanol markets. The CEO expects the efforts to help the company generate a good amount of profit even as the overall industry continues to face uncertainty.

The company is fresh from signing a binding agreement with a 140-year-old Germany company as part of an effort that seeks to strengthen operations on specialty chemicals and fuel products. Gevo, Inc. (NASDAQ:GEVO) is also working on a number of deals to meet the 50% production capacity at the Luverne Plant.

Gevo, Inc. (NASDAQ:GEVO) is a renewable chemical and biofuels company. The company’s core operations revolve around the development and commercialization of alternates to petroleum-based products as a source of energy. The company is currently engaged in the research and development of isobutanol among other biocatalysts.

Gevo, Inc. (NASDAQ:GEVO) is also capable of converting cellulosic sugars into isobutanol, jet fuel, and isooctane

Budget Cuts Impact

The DOE could see its $5 billion budget trimmed by 20% amidst reports the Trump administration is considering a string of budget cuts. The direct impact of the move on Gevo, according to the CEO, is minimal.

“To be very clear the direct impact to Gevo is minimal in those kinds of budget cuts. The potential impact could be more direct on the cellulosic programs which have more exposure to DOE programs,” said Mr. Gruber

Gevo, Inc. (NASDAQ:GEVO) is currently exploring various federal programs with a view of getting loans and grants for financing its operations. Minnesota is one of the states that the company is eyeing for subsidies given that the state has similar programs for chemical products.

In a bid to strengthen its balance sheet, Gevo, Inc. (NASDAQ:GEVO) has restructured its debt structure by exchanging most of its unsecured 2022 converts.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $GEVO and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Crucial Earning’s Announcement for Gevo, Inc. (NASDAQ:GEVO) on Wednesday

Gevo, Inc. (NASDAQ:GEVO)

It is rare that a firm trades at a 50% discount to their cash/share figure but that is the case with Gevo, Inc. (NASDAQ:GEVO). For most of March GEVO shares have been trading around the $1 level but reports place their cash/share at $2.24. The last two days have seen an increase in GEVO’s share price and in early morning trading GEVO shares are up around $1.22 on volumes over three times their normal average.

Gevo, Inc. (NASDAQ:GEVO) is in the alternative fuel sector. Gevo develops and commercializes alternatives to petroleum-based products such as isobutanol and ethanol. Its production plants Luverbe, MN and Silsbee, TX produce isobutanol, ethanol, and protein-dense animal feeds. Isobutanol is used for specialty chemicals, blended fuels, and polyester manufacturing.

While Gevo has an impressive cash/share figure, it is bleeding cash and has debt maturing this year. Further, it has a negative gross margin of over -30%. For Q3 2016 Gevo, Inc. (NASDAQ:GEVO) reported an operational loss of $6.1 million on revenues of $6.9 million. Gevo, Inc. (NASDAQ:GEVO) went public in 2011 and since then the original shareholders have experienced a 99% loss in the value of their equity – share offerings massively diluted shareholders along the way down. The company has experienced two large reverse stock splits – one at 1:15, and the other at 1:20. When all of these factors are taken into consideration, it is not much of a leap to see why GEVO shares are trading at such a large discount to its cash/share figure. The company has a history of diluting its shares but not really out-performing on its earnings forecast.

With revenues of $29 million and long-term debt of $36 million, it would not surprise analysts if another round of share dilution was around the corner unless Gevo, Inc. (NASDAQ:GEVO) is able to re-negotiate a possible refunding. However, with weak earnings that possibility is remote. Shockingly, HC Wainwright gives GEVO shares a rating of “Strong Buy”. Rodman & Renshaw, in January, reiterated their rating of “Buy” on Gevo, Inc. (NASDAQ:GEVO).

Gevo, Inc. (NASDAQ:GEVO) will be releasing their earnings report on March 29 and provide a corporate update.

3/27/2017
Ticker Symbol GEVO
Last Price a/o 12:12 PM EST  $                      1.28
Average Volume                1,900,000
Market Cap (mlns)  $                    15.70
Sales (mlns) $28.70
Shares Outstanding (mlns) 13.89
Share Float (mlns) 13.15
Shortable Yes
Optionable Yes
Inside Ownership 0.10%
Short Float 11.55%
Short Interest Ratio 0.8
Quarterly Return -71.75%
YTD Return -66.76%
Year Return -87.72%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance.