Asset Plays Investing
Value

The Biodiesel Tide Is Going Out: Neste Oil Is Swimming Naked, 75% Downside

Neste Oil (OTC:NTOIF) currently benefits from the Renewable Fuel Standards in its biodiesel refining business. As the EPA proposals for lower blending mandates are implemented, Neste Oil's earnings will decrease sharply. A lucky refiner remains a refiner: sell Neste Oil for 75% downside.

Refining background

Neste Oil is a European refiner. European gasoline and diesel demand has been in steady decline for 10 years due to rising energy efficiency. Cars drive more miles per gallon year after year. That trend is certain to continue independently of the economic outlook. As a result, the European refining industry alternates periods of poor and very poor profitability. Periods of very poor profitability last until refiners throw the towel and shut a...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
FREESA PRO MEMBERS
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details