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Although I don't participate in this list actively anymore I do feel that on
rare occasion I might recommend a stock for people to buy on fundamentals.
It is hard to put a system on this stock as it has yet to have a real up
trend.
See below:
If a stock that is in a long term downtrend finally has a huge surge in
earnings it can sure be a surprise when the stock resumes the downtrend even
when the company announces a stock repurchase at 67% above the current
market price. Believe it or not that is what has happened with GPRE. An
ethanol company that went public somewhere around $50 went downhill ever
since. Now that they are reporting blockbuster earnings they are being
panned by the media. On CNBC recently on FAST MONEY ethanol was touted as
the fuel that was to worsen global warming. The report that infers this is
related to all of the forests that are being cut down in Brazil for farming
not that any American farmers are doing that. This combined with the surge
in corn prices left people to wonder if ethanol companies could make any
money. GPRE already had contracts in place for 60% of the corn they needed
for this year. they weren't hurting. Going forward with record prices for
ethanol and a limit down in corn yesterday means that all of the corn crop
fears this year are just unfounded. With all of the flooding only 6% of the
corn crop will be lost. GPRE will report another great quarter in August, no
doubt.
Not only that they are turning a new plant on line this summer.
they are earning so much money that they have announced a $60 million stock
purchase plan at $10 a share. Not bad because you can buy it now at $6.
I feel that this is a buy for my friends and I highly recommend it for my
friends. Ethanol will be a fuel of the future as we just don't have the oil.
good luck.
Jim Bronke
Jim Bronke
Avionics and System Engineering
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