DaveM

Ethanol and Biodiesel: Two Very Different Biofuels

The comment of turning Glycerine into Ethanol is interesting, but Nova's proprietary process, when you look at their patents, actually USES this glycerine to convert the high FFA feedstocks into low FFA feedstock. It is a process more commonly known as Glycerolysis - which was first identified in the 1940's in oil & soap magazine and has several dozen prior art references.... hence the challenges Nova has had recently with USPTO getting their patents past the pending stage.

This has two impacts: First, don't count Glycerine sales as a potential revenue stream... they'll need to use it. Second, don't assume their business has significant barriers to entry. Their patents don't support this and several others are locking up their 'low cost' feedstock because they've read the 60 year old documents and more recent research from NREL and figured out how to duplicate Nova's process (without the cost of patent attorneys, OVHD, etc.).

I like NOVA and their short term opportunity definitely represents an opportunity for a market cap in the range they're trading in... but 4 years from now they're going to be one of many - especially given the new developments in supercritical, solid state catalysts and biological based biodiesel creation (not to mention renewable diesel).