Recs

15

1-Star Stocks Poised to Plunge: Green Plains?

Based on the aggregated intelligence of 150,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, ethanol producer Green Plains Renewable Energy (Nasdaq: GPRE  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Green Plains' business and see what CAPS investors are saying about the stock right now.

Green Plains facts

Headquarters (Founded)

Omaha, Neb. (2006)

Market Cap

$417.8 million

Industry

Oil and gas refining and marketing

Trailing-12-Month Revenue

$1.3 billion

Management

CEO Todd Becker (since 2009)

CFO Jerry Peters (since 2007)

Trailing-12-Month Return on Capital

3.6%

Price-to-Earnings (GPRE and Industry)

21.2 and 14.8

1-Year Return

1,096%

Competitors

Archer Daniels Midland (NYSE: ADM  )

Pacific Ethanol (Nasdaq: PEIX  )

Other Ethanol Stocks

The Andersons (Nasdaq: ANDE  )

MGP Ingredients (Nasdaq: MGPI  )

Highly Rated Green Energy Alternatives

Cosan (NYSE: CZZ  )

Suntech Power (NYSE: STP  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 56.6% of the 122 members who have rated Green Plains believe the stock will underperform the S&P 500 going forward. These bears include DarthMaul09 and jed71.

Late last year, DarthMaul09 warned our community about being corny:

I thought that ethanol for fuel went out with the Bush administration. Now it's electric and dual fuel cars. ... The added benefit of ethanol was to the growers and crop prices. I suspect that political support for ethanol supplements will fade if this impairs domestic auto sales or causes other unforeseen problems.

In a pitch from two days later, jed71 also advised Fools to find another alternative. Here's an excerpt:

I was looking at their quarterly statements and, although revenue is growing by leaps and bounds, operating profits are incredibly thin. They also do not have positive operating cash flows yet on normal operations (stripping out acquisitions), and are sitting on a pile of debt. ....

They have got to get their expenses under control, show a profit for a few quarters and spend a little time shoring up their balance sheet rather than continuing to acquire bankrupt biofuel firms. Smart growth, not growth at any cost. ...

My gut instinct tells me the tide will turn against Ethanol in the next few years and trend toward cheaper energy sources that don't impact America's food source, such as Natural Gas.

What do you think about Green Plains, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Suntech is a Motley Fool Rule Breakers pick. The Fool's disclosure policy always gets a perfect score.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 02, 2010, at 10:43 AM, satre6 wrote:

    You really need to do a little due diligence before you put such drivel out in the public. Food for fuel is a joke. Corn prices are at a very low price, ethanol production is over 12 billion gallons and there is no shortage of food due to ethanol production. GPRE has more than quadrupled in size over the past 2 years and has a lead on algae production which is a secondary source of fuel and a carbon sequestration issue. Oil is around $80, gasoline is $2.10 ethanol is $1.70 and we don't have any farmers touting "nuclear threats". More importantly the money stays at home.

  • Report this Comment On March 04, 2010, at 5:02 PM, NebrCornhead wrote:

    GPRE is here to stay. With corporate leaders who know the business, the company has diversified across other areas of agriculture. If GPRE isn't a sure bet, than neither is the farmer or trains & trucks that haul the fuel and bi products. You have to be in this company for the long haul. Considering foreign company's latest goofs in the auto industry, GPRE gives us confidence in another of Americas companies.

  • Report this Comment On March 04, 2010, at 10:04 PM, Gary399210 wrote:

    The most important report ever published on ethanol has just been released to the public.

    March 4, 2010

    It is the long awaiting EPA report on the implementation of the law passed by Congress and signed by the President entitled, the New Renewable Fuel Standard (RFS2). The law for RFS2 requires the use of 36 billion gallons of by 2022, up from 11.9 billion gallons required in 2010.

    A few of the significant quotes from the EPA report are these:

    1.” The government’s new RFS2 will have a wide-ranging economic impact far beyond its effect on fuel producers, creating winners---and losers next decade. One of the biggest winners under the new regulations is corn-based ethanol”.

    2. The EPA states:”We are projecting that renewable fuel production costs will decline and crude oil prices will rise to the point that renewable fuels are less expensive that gasoline and diesel fuel, even in the absence of tax subsidies. This implies that market forces will lead to a greater increase in renewable fuel volumes, even in the absence of government requirements.

    3. “The EPA believes that cellulosic renewable fuels are least likely to achieve the government mandates due to market forces alone”. This implies that corn ethanol is most likely to reach the government mandates due to market forces alone.

    4. The EPA projects a major buildup in E85 facilities. “Overall the EPA estimates that it will take $3 billion to upgrade the E85 facilities enough to meet the requirements of the new government standards”

    5. In a separate report quoted in the Kiplinger report on biofuels, the headline reads, “Shipping Ethanol via Pipeline Is Very Efficient”.

    The Kiplinger Market Alert contains details on these statements above as well as other significant information. Again we think the EPA report on RFS2 is the most significant report ever written on the production and use of ethanol in the U. S. We urge you to read it, study it, and bring yourself and others up-to-date on the latest important developments in ethanol.

    The gradual transition to using more ethanol will be one of the most important changes in the history of the industrialized world.

  • Report this Comment On March 05, 2010, at 11:46 AM, E85Prices wrote:

    Rather amused every time I hear that ethanol is dead nonsense.

    Ethanol production as stated by poster satre6 is at nearly 12 billion gallons this year up from a little over 10 billion gallons last year. Corn prices have fallen from nearly $8 a bushel to around $3.50-$4.00 a bushel.

    General Motors specifically asked for another 10,000 E85 Pumps as they ramp up Flex Fuel Vehicle production ..50% of production to be FV by 2012 and 80% by 2015 .

Add your comment.

Compare Brokers

Fool Disclosure

DocumentId: 1124833, ~/Articles/ArticleHandler.aspx, 5/27/2012 7:40:55 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 12,454.83 -74.92 -0.60%
S&P 500 1,317.82 -2.86 -0.22%
NASD 2,837.53 -1.85 -0.07%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

5/25/2012 3:59 PM
GPRE $7.20 Up +0.01 +0.14%
GREEN PLAINS RENEW… CAPS Rating: *
MGPI $3.47 Down +0.00 +0.00%
MGP INGREDIENTS, I… CAPS Rating: *
PEIX $0.72 Down -0.04 -4.67%
Pacific Ethanol, I… CAPS Rating: *
STP $1.78 Down -0.15 -7.77%
Suntech Power Hold… CAPS Rating: ***
ADM $32.25 Up +0.15 +0.47%
Archer Daniels Mid… CAPS Rating: ****
ANDE $44.85 Up +0.40 +0.90%
The Andersons, Inc… CAPS Rating: ***
CZZ $11.90 Up +0.13 +1.10%
Cosan CAPS Rating: ****

Advertisement