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Dathan Pyle's  Instablog

Dathan Pyle
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Founder of FDR Investment Group. Main interest in technology, biotechnology, pharmaceutical, momentum and value stock trading and investing. Follow me on twitter @dpyledriver
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FDR Investment Group
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  • Waiting For A Bottom To Jump On GEVO 0 comments
    May 18, 2014 11:43 AM | about stocks: GEVO

    Gevo, Inc is a renewable energy technology, chemical products, and next generation biofuels company. Their primary focus is in the production and distribution of isobutanol, a clean fuel made from organic compounds. They also produce and distribute Ethanol and related fuel products that are more mainstream to increase cash flow while isobutanol is being evaluated.

    Last month, Lufthansa announced that they will be evaluating Gevo's fuel for commercial aviation use. Lufthansa is the largest airline in Europe in terms of overall passengers.

    Share prices of Gevo have taken a hit recently after announcing that they are switching majority of their Luverne, Minnesota plant to ethanol, posting a wider than expected loss in Q4 of 2013, and receiving analyst ratings with $1 to $1.30 price targets .

    OUR TAKE: I believe GEVO made a great decision in stepping up their Ethanol production and distribution. Their decline in revenue should turn positive as a result of the new ethanol sales while they continue to push isobutanol to broader markets. My overall feeling about shares of GEVO is that the recent downward trend could continue short term. However, we believe a turnaround is likely this year and we intend to set up a long position in them with a initial buy target of .85 cents.

    Note: We use 20% of our portfolio for companies like Gevo, Inc that are somewhat of a high risk but have the potential for large returns in the future. Majority of these stocks are currently trading under a dollar. Other companies in our "High Risk/Great Reward" portfolio include IDN and ONCS. Former companies that have exploded into new highs that were in this portfolio include HIMX (From $4 to $16) and GSAT (From .63 cents to $3.)

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in GEVO over the next 72 hours.

    Stocks: GEVO
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