coursonc

Ethanol: Our Answer to Reducing U.S. Dependence on Foreign Oil

Buy Verasun Energy, VSE under $6, below book, and below recent insider buying, while you still can. Crush spread is thin, but is the 800lb Gorilla in the space, with Welcome pending startup Reynolds halted. I also expect UL certification approval announcement soon for Blender pumps and will be a major positive. EPA answer to Gov Perry shows Government intent. Recent announcement of Shelf offering will allow debt repayment, stock buybacks, and cash for aquisitions, as it is perceived to be cheaper to aquire, than to build. I see BIOF or GPRE in the crosshairs, possiblly some small independents. AVR and PEIX not a good fit. VSE should see rev increase due to merger synergies from USBE, and Aurora corn oil processing soon. coursonc

VeraSun Energy: A Growth Stock Reborn

Here is what I see: E production is on the rise, with VSE currently idling two plants, Welcome, Hartley,and Dyersville, Hankinson just started, and Janesville set for next qtr, so its obvious that E volume growth is continuing. They are just starting the corn oil production, and just seeing some of the synergies of the merger with USBE also, so I see continued effeciancys of scale that are yet to be realized to full capacity. Meanwhile, the UL has pending certification of higher blend equipment and blendpumps that the retail arena is awaiting to install that will blow the lid off higher use of E, removing the "blend wall" concerns, or fear of "glut' of product, especially in this high oil enviroment. There may be a slight pricing discount that comes with selling E in blends higher than E30, as the consumer will be sensitive to the inherently lower energy density of E as compared to gasoline, as the burning effeciancy due to the higher oxygenate, as a lower blend is lost, at higher blend ratios. Rapid adoption of higher blends, namely E85 thru the mandate of 100% flexfuel vehicles like McCain wants, will push the growth envelope much higher than the RFA mandates. Recent denial of Tx Gov Perry request to reduce the mandate to 4.5 from 9.0 by Johnson, just shows the EPA stance on E as a partial solution to US reliance on foreign oil for transportation needs. E is here to stay. Goodbye Chavez, and your OPEC terroist buddys. Deal with it. coursonc