Gevo, Inc. (NASDAQ: GEVO)
Gevo has been an incredibly interesting stock to watch as of late. If you’ve followed my work, you know that I’ve followed them closely. Lately, there has been quite a bit of conversation surrounding isobutanol and jet fuel. Essentially, investors are talking about the company’s off-land products. At this point, we all know that the company has tackled the air and sea, but what about the land? Today, we’ll dig a bit deeper into the company’s plans with regard to road-use fuels, how this can change the game for the stock, and what we can expect to see from GEVO ahead.
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Is Road-Use Fuel In The Cards For GEVO?
At this point, investors are incredibly excited about Gevo jet fuels and their relationship with Alaska Airlines. They also like the idea of Musket distributing iosbutanol-blended fuel. While I believe that both of these can lead to tremendous growth for the company ahead, investors seem to be missing a big factor here. For some reason, no one seems to be talking about road-use fuels.
I will admit, I am guilty of not paying enough attention to this area as well. However, in a recent interview with Dr. Pat Gruber, CEO at GEVO, I had my eyes opened. Pat was adamant about the fact that it’s important to look at Octane and the work the company is doing there. In fact, here’s what he had to say when we veered onto the topic:
“It’s like I said… the interest has been generated from the jet fuel, and we also have isooctane. Everyone forgets about isooctane because I think they don’t understand it. This is something to think about. When people see octane, they think, ‘Oh that’s stuff that’s labeled on gasoline,’ or the ethanol guys all go, ‘Oh, well that’s what ethanol provides, octane.’ That’s not what I’m talking about. What I’m talking about is… if ethanol does 10% of the gasoline, we can do the other 90% of the gasoline. That’s what I’m talking about. That’s a big deal as low-carbon fuels come into play to the future. Because how else will someone get it? We appear to have the only viable technology to make that stuff.”
Isooctane Can Change The Game
Don’t get me wrong, I don’t want to discount the potential of jet fuel or isobutanol in any way. At the end of the day, these products alone could be massively profitable for GEVO. However, I also think that it’s important that we focus on Isooctane. As Pat pointed out in our discussion, octane accounts for the vast majority of the gasoline that we put in cars, vans, trucks, motorcycles, and more.
Knowing this, I’m sure that you understand how this could become profitable. The good news is that GEVO is working in this area as well. The company has created a product known as isooctane, which it also has the ability to scale and sell. Think about what a green octane would mean for the gasoline industry! Think about the profits that this product can bring down the line. At the end of the day, isooctane is something that investors should be watching closely.
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from Gevo in the long run. When I first started and throughout the majority of my coverage on this stock, I focused on jet fuel and isobutanol and the massive implications these products come with. This alone made me excited for the future. However, after my most recent chat with Dr. Gruber, I’ve become even more excited. Isooctane looks like it could be the goose that lays the golden egg, and it could help to produce a cleaner way of life in the process.
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What Do You Think?
Where do you think GEVO is headed moving forward? Join the discussion in the comments below!
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