Basic Materials

Freeport-McMoRan FCX Stock News

Freeport-McMoRan Inc (NYSE: FCX)

Freeport-McMoRan has a big day coming up tomorrow, and it’s one that I believe will be overwhelmingly positive. That’s because the company will be reporting its results for the second quarter before the opening bell tomorrow. Today, we’ll talk about what analysts are expecting to see, why I believe that analysts have missed the mark, what I’m expecting to see, and what we can expect from FCX moving forward. So, let’s get right to it…

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Analysts Aren’t Expecting Much Of A Positive Quarter From FCX

As mentioned above, Freeport-McMoRan will be reporting its earnings for the second quarter tomorrow before the opening bell. When it comes to analysts views, the report isn’t likely to be a very positive one. In fact, According to NASDAQ and based on 11 analysts forecasts, the overall consensus is that the company will produce a loss of $0.01 per share. This shows a massive decline from the gain of $0.14 per share realized in the same quarter last year, but strong growth from the loss of $0.16 per share realized last quarter.

I Believe That Analysts Have Missed The Mark

While I understand the relatively bearish views held by analysts, I have to say that I believe they’ve missed the mark in this case. The reality is that the second quarter was likely an incredibly positive one for FCX. You see, the company is focused on mining basic materials. The vast majority of its revenue comes from mining copper. The second quarter was a positive one for copper, as the Chinese economy started to see a boost, leading to higher demand from the world’s largest consumer of the metal.

In fact, through the company’s entire product portfolio, oil, which accounts for a very small percentage of revenue, is the only product that didn’t have a strong quarter. With that considered, I’m expecting that the revenue from the company’s sales will top expectations, leading to positive earnings and exciting investors.

What I’m Expecting To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from FCX. The company has faced a hard time over the past year as the prices of commodities continued to fluctuate. However, in the second quarter, we saw quite a bit of strong news surrounding copper and gold. Between the two, these commodities make up about 70% of the company’s total revenue. Considering the strong news surrounding the products sold by Freeport-McMoRan, I’m expecting incredibly strong results this quarter. As a result, we should see strong movement in the market tomorrow and in the short run.

Also, in the long run, my opinion remains relatively bullish. While FCX may run into headwinds as global economic concerns continue to shake and shape the market, in the long run the company is well positioned for solid growth. Copper and gold are likely to continue heading upward for some time to come. The excess gains on these commodities will likely act as a hedge to the slight losses the company might see in the oil segment. All in all, things are looking great for FCX moving forward.

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Southwestern Energy Corporation SWN Stock News

Southwestern Energy Company (NYSE: SWN)

Southwestern Energy Company is having an incredible trading session today, and for good reason. The company reported its earnings for the most recent quarter, beating expectations. However, there was some bad news in the report when it comes to revenue. Nonetheless, today we’ll talk about what we saw from the report, how the stock reacted to the news, and what we can expect to see from SWN moving forward.

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SWN Reports Q2 Results

As mentioned above, Southwestern Energy is having a strong day in the market today after producing strong earnings. While earnings were indeed a hit, the company missed expectations with regard to revenue. Here’s what we saw from the report:

  • Earnings Per Share – When it comes to earnings per share, SWN definitely did not disappoint. During the second quarter, analysts were expecting that the company would report a loss of $0.10 per share. However, the company reported that during the second quarter, it produced a narrower loss of $0.09 per share.
  • Revenue – In terms of top-line revenue, SWN didn’t quite fare as well as it did with regard to earnings. During the second quarter, analysts were expecting that the company would generate revenue in the amount of $534.4 million. However, the company actually reported that, for the quarter, revenue came in at $522 million.
  • Guidance – While earnings were a hit and revenue was a miss, the tie breaker here was guidance. Southwestern Energy increased production guidance for the year 2016 by 45 Bcfe, or 5%, to 865-875 Bcfe, from earlier guidance of 815-835 Bcfe.

While revenue for the quarter was a miss, the earnings report was positive overall. This positive data was followed up by SWN CEO Bill Way with the statement below:

As promised, we took significant and deliberate steps this quarter to strengthen our balance sheet that, when combined with the continued outperformance by our assets, positions us to reinitiate drilling and completion activites and accelerate our path to value-adding growth…”

How The Market Reacted To The News

Although revenue for the quarter was a miss, investors are overwhelmingly excited about the report. With strong earnings and the company guiding toward increased production, investors are viewing the report as positive. As a result, we’re seeing strong gains in the value of SWN today. Currently (2:16), the stock is trading at $14.42 per share after a gain of $1.22 per share (9.24%) thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have a relatively mixed opinion of what we can expect to see from Southwestern Energy. In the short term, investor excitement could push this thing higher. However, the increased guidance on the earnings report points to big issues that the company is likely to face in the long run. It seems that investors are forgetting that the oil industry is struggling at the moment. With a supply glut in place, demand simply isn’t adding up to big dollars for the industry any more. However, more and more, we’re seeing companies like SGY working to increase production. If this production increase continues, we’re going to see big declines in oil. This will ultimately equate to declines in the value of the stock. So, there’s a double-edged sword here. Is there money to be made now? Sure. However, if you’re going to get in on this one, make sure you’re cautious and watch the oil price very closely.

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Chesapeake Energy Corporation CHK Stock News

Chesapeake Energy Corporation (NYSE: CHK)

Chesapeake Energy Corporation has been a very interesting stock to watch. While the stock has struggled for some time now, some seem to think that we’re reaching the bottom and that it will pop back up. This is creating a ton of volatility. Now, let’s get one thing straight, I will not say that CHK is a strong investment opportunity. In fact, I believe the exact opposite. However, there are some opportunities that are going to be incredibly profitable for the day trader. Today, we’ll talk about why I don’t believe that the stock is a strong investment opportunity as well as why it presents strong day-trading opportunities.

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CHK As A Long Term Investment… Bad Move!

First and foremost, lets address the idea of Chesapeake Energy as a long-term investment. At the moment, this just doesn’t seem like a good idea. The reason for this is simple, it lies in the company’s product. The company is focused on the exploration, drilling, and sales of oil. As a result, it is highly susceptible to movements in the value of oil. When the value of oil goes down, the profits the company makes from its flagship product decline.

Now, take a look at the oil market. Unfortunately, conditions are far from positive. For more than a year now, we’ve been dealing with a supply glut that has had the commodity trading at incredibly low levels. While there is hope that oil will start to gain in value soon, it doesn’t look like this is going to happen any time soon. As a result, low oil prices will likely keep CHK on a trend downward.

Will The Stock Ever Be A Good Long-Run Investment?

The truth is that no one can see into the future, and I’m not going to pretend to be able to. However, I can say that I do believe that CHK will be a good investment one day, just not any day soon. While oil continues to be surrounded by uncertainty, this one remains very risky. However, oil won’t stay low forever. When a recovery does happen, there will be huge long-run gains to be made here. Nonetheless, you don’t have to wait for strong opportunities. There are plenty at the moment!

This Is A Great Stock For The Day Trader

While Chesapeake Energy’s long-run outlook isn’t great at the moment, there are tons of opportunities surrounding the stock in the short term. These opportunities are great for day traders. The truth is that trading CHK can be much easier and much more profitable than many other stocks.

When it comes to Chesapeake Energy, the stock is highly dependent on the value of oil, which is what has caused quite a bit of volatility in the stock as of late. When the value of oil starts to drop, we see declines in the price of the stock. Adversely, when the value of oil is headed up, we’re seeing gains in CHK.

As a result, a great way to play this one is to watch oil. When you get started for the day, take a look at the oil market to see if things are going up or down. If oil is falling, it’s a good day to ignore CHK. However, if oil is gaining, it’s likely a good time to buy. Then, sell the shares at the end of the day and take your gains as more declines are likely on the way.

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Gevo GEVO Stock News

Gevo, Inc. (NASDAQ: GEVO)

I’ve been covering Gevo for some time now, and I have to say, I’m incredibly impressed with the stock. As with any other stock, there are plenty of people on the bullish side and also plenty of people on the bearish side. However, taking a bearish approach on this stock is a mistake, in my opinion. Today, we’ll talk about three reasons that I believe GEVO will soar moving forward.

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GEVO Won’t Be Getting Delisted Any Time Soon

Before we get into reasons for this to soar with regard to products and agreements, it’s important that we talk about an issue that investors have been watching closely. That issue is a possible delisting from the NASDAQ. You see, NASDAQ requires that stocks listed maintain a bid price of at least $1 per share. Unfortunately for Gevo, their stock is trading at about half that.

In a recent interview with Pat Grubber, the CEO at GEVO, I asked about this issue. I wanted to know if there are any specific plans to avoid delisting. While he wouldn’t offer anything specific, he did say that the company would be dumb to let themselves get delisted.

At the end of the day, the company has several opportunities. However, looking at the situation as it unfolds, it seems to me like a reverse stock split is in order. If the company processes a 3-for-1 reverse stock split, it will be out of the woods with the delisting behind them. Again, this isn’t something that anyone at GEVO told me. I’m just analyzing the situation after what Pat Grubber said in the interview. Nonetheless, I’m not expecting delisting, and I believe that it’s something you shouldn’t be concerned about.

Isobutanol Will Likely Lead To Big Profits

One of the products at Gevo that investors are watching closely at the moment is isobutanol. This is a chemical designed to mix with gas. Isobutanol is a highly flammable gas. However, it is a cleaner fuel than gasoline. So, by mixing Isobutanol with gasoline, we find a cleaner product to fuel cars, jet skis, and, really, anything else that runs on gas.

There’s a ton of value in this product, and I’m not the only one that sees it. Recently, Musket Corporation, a member of the Love’s Family of Companies, signed an agreement with GEVO. Under this agreement, Musket will soon be distributing isobutanol-blended gasoline. In the beginning, the blended gasoline will be promoted as a great fuel for marine and off-road vehicles. However, the target audience is likely to expand.

During the interview I mentioned above, I asked Pat about isobutanol. I had been getting a ton of questions with regard to the company’s production abilities. After all, Musket is a huge distributor. So, I asked if GEVO had any concerns with regard to production and if it was reaching out to any R&D companies for help. I was surprised with the answer I got. At the end of the day, Gevo isn’t reaching out to any companies for help. In fact, Pat explained that production isn’t an issue and that the company would have no problem meeting demand. All in all, Isobutanol is ready and will likely soon lead to profits.

The Future In Air Travel

Another reason that I maintain an incredibly bullish opinion on GEVO has to do with air travel. The company has created a green, renewable jet fuel. This is incredibly important as we continue to see a shift in opinion with regard to burning oil. At the end of the day, burning fossil fuels leads to harmful changes in the environment. Jet fuel is a big area where something needs to change.

Recently, Gevo green jet fuel was used in 2 commercial Alaska Airlines flights. The people in the lobby and the people on the planes cheered the idea. At the end of the day, clean jet fuel is a win-win for the company and its customers.

When airlines fly using green jet fuel, they can promote that action. This will likely lead to stronger sales for the airline. Of course, the better sales get for airlines using green jet fuels, the better GEVO sales will get.

In the discussion I had with Pat, I asked if there were any future plans for commercial flights. He explained that Alaska Airlines said that they would be using the jet fuel in future flights. Considering how this could change the game in air travel, it’s only a matter of time before jet fuel becomes a major source of revenue for GEVO.

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Stone Energy Corporation SGY Stock News

Stone Energy Corporation (NYSE: SGY)

Stone Energy has been an incredibly interesting stock to follow as of late. Since late May, the stock has been gaining, with a big push upward happening over the past month. However, on July 12th, I published a release warning that this thing was getting too high. At the end of the day, it was destined for declines. On July 14th, SGY shed more than $3 per share! Now, we’re seeing relatively flat movement. However, I believe that this flat movement is the calm before the storm. At the end of the day, this stock is destined for declines. There are 4 big fundamental reasons that we can expect this thing to sink further. Today, we’ll talk about those reasons.

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Reason #1: SGY Is Already Drowning In Debt, And Will Likely Continue To Do So

When we talk about Stone Energy, we’re talking about a company that has, historically, taken a beating when it comes to earnings. Unfortunately, the company simply isn’t good at producing a profit. One thing they are good at, though, is raising money through debt.

The truth is that, last year, SGY produced a loss of $1.1 billion total. Furthermore, the company also has about $1.5 billion in debt. With such high operating expenses leading to losses, the company is in a tough position. It will have to continue borrowing money. Therefore, even if it did generate strong revenue, the majority of the revenue would have to go to paying off debts. This leads to a dangerous revolving door, and SGY is getting caught in the trap.

Reason #2: Conditions In The Oil Market Aren’t Likely To Improve

As the name Stone Energy would suggest, the company is in the energy sector. This is a sector that’s highly dependent on oil. When the price of oil is low, the company’s revenue and profits sink. For quite some time now, we’ve been in the midst of a crisis brought on by an oil supply glut.

Given global economic conditions, demand isn’t likely to climb any time soon. This, combined with the fact that rig counts are climbing and suppliers are working to increase production, is a recipe for another drastic decline in the value of oil. However, even if drastic declines don’t happen, the price of the commodity isn’t headed up any time soon. So, oil paints a relatively grim picture for SGY. With oil prices remaining low, the company is going to have a tremendously hard time generating any profits!

Reason #3: Take A Look At Analyst Opinions

While I’m not a fan of blindly following analysts, when opinions aren’t mixed and other factors fall in line, analyst opinions tend to be icing on the cake. Let’s face it, these guys and gals make their living by analyzing stocks and making predictions on where their values are headed. They know how to do their research! With that said, the overall analyst opinion of SGY is absolutely horrible.

According to NASDAQ, all analysts weighing in on the stock have it rated as a “Hold” or a “Sell.” Price targets on the stock suggests that we’re going to see losses for at least 3 years, with the consensus estimate of a $25.29 loss per share in the current year. That is a massive loss for a company with such a massive debt load. At the end of the day, analysts aren’t expecting anything good out of Stone Energy. Looking at the data myself, I happen to agree with them.

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Freeport-McMoRan FCX Stock News

Freeport-McMoRan Inc (NYSE: FCX)

The current market conditions have made finding a strong investment more challenging. However, any time markets are uncertain, there are always opportunities. I’ve been digging around and one of the opportunities I’ve found is Freeport-McMoRan. At the end of the day, the company is in the right market at the right time. Today, we’ll talk about why FCX is likely to skyrocket moving forward.

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Copper Will Send FCX Skyrocketing

To understand what’s direction a stock is likely headed in, it’s important to understand what the company the stock represents does. When it comes to Freeport-McMoRan, the company is in the business of mining basic materials. The flagship product from the company is copper. In fact, the metal makes up over 60% of the company’s total revenue. This is a key fact to consider when trading or investing in the stock.

Knowing that FCX largely depends on copper, we now know where to look when determining where the price of the stock is headed. At the moment, copper is a great product. Let’s face it, it’s a hot commodity. In fact, there are three reasons why copper is likely headed up, and when this happens, FCX will realize larger profits on the commodity.

Reason #1: Renewable Energy

The first reason that I’m expecting to see big gains in the price of copper, and, therefore, Freeport-McMoRan stock, is the global view on energy. In the past, burning fossil fuels seemed like the best way to go. After all, the action was highly productive. So, entire nations did so for years and years.

However, over time, we’ve seen how the burning of fossil fuels harms the environment. As a result, we’re seeing a global shift toward renewable energy. These days, we’re seeing increased demand for solar, wind, and hydro-power. We’re even seeing entire solar and wind power farms being constructed around the world. Believe it nor not this is great for FCX.

At the end of the day, if you’re going to build anything that has to do with the cultivation and transfer of energy, you’re going to need copper – a lot of it! With so much going on in the energy sector around the world, we’re seeing ever-increasing demand for the metal. As the law of supply and demand tells us, this must send the price of copper upward. So, due to this shift in the energy sector, copper prices will likely continue to rise, increasing profits for FCX.

Reason #2: Asian Interest Rate Expectations Could Support Further Growth

China is the world’s second largest economy and largest consumer of basic materials. With that said, if you plan on trading Freeport-McMoRan, it’s going to be important to watch economic conditions in the region. Most recently, investors have started to expect that the People’s Bank of China will reduce its interest rate. As a result, risk appetites among investors in the region will grow. This will likely lead to higher metals prices in the country that consumes the most copper. So naturally, this should send the price of the metal upward. In a statement, Mitchell Hugers, Commodities Strategist at BMI Research, had the following to offer:

Easing rates will likely support metals prices in the short term as it will boost risk appetite for investors…”

Reason #3: Weakening USD

For some time, the United States Dollar was seeing massive gains against other currencies. However, throughout the year 2016, we’ve seen something very different. The value of the currency has seen declines. Because copper is priced using the USD, this will generally lead to gains, which, in turn, will help FCX.

Because copper is priced using the USD, when the value of the currency rises, it makes the metal more expensive in nations outside of the United States. However, when the USD falls, copper becomes less expensive around the world. Because of this, the metal becomes more accessible, increasing demand. This sends the price of the metal upward. At the end of the day, as the USD declines in value, profits realized at FCX will climb.

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Chesapeake Energy Corporation CHK Stock News

Chesapeake Energy Corporation (NYSE: CHK)

Chesapeak Energy Corporation has had a strong run in the market in recent trading sessions. As a result, we’re seeing headlines telling you to add this to your watch list, or that there is tremendous opportunity here. However, there’s quite a bit of short- and mid-term risk in the stock that everyone seems to be ignoring. Today, we’ll talk about the risks, what I’m expecting to see from CHK moving forward, and other opportunities in the sector that have a much better chance of yielding strong returns, in my opinion.

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If You’re Considering CHK, Here’s what You Need To Know

Before investing in any company, it’s important that you take a look at what the company does and the landscape within the sector. In this particular case, Chesapeake Energy is a petroleum and natural gas company. This means that their money largely comes from oil, which creates a huge risk.

When the value of oil heads upward, the profit that CHK generates follows it up. However, when oil declines in price, the company sees declines in profits. At the moment, oil is trading at incredibly low levels. And all signs seem to be pointing toward declines in oil.

Like any other commodity, oil is heavily dependent on supply and demand. While supplies are already far higher than we need them to be, we are seeing a continued increase in production. In fact, in the last week, the number of operating oil rigs in the US climbed again. This is the sixth week over the past seven that we’ve seen increased rig counts. This time, the US added 6 operational rigs for a total of 357 currently. Higher production means higher supply. That’s not good for oil, nor companies like CHK that make their money from the commodity.

Economic Blues Will Likely Weigh Heavy Moving Forward

I find today’s market to be an incredibly interesting topic. The fact that global economic conditions are in such a rough place while we are nearing record highs doesn’t make sense to me. Now, I don’t want to be a doomsday theorist, but something’s got to happen here, and until something big does happen, we’re likely to see continued declines in the global economy. That’s a horrible thing for Chesapeake energy and other oil production companies.

As issues like the Brexit, Asian economic uncertainties, and more continue to pop up, consumers are going to work to spend less money. One of the first places they look to cut costs is oil. Think about it, when we’re not sure if the next dollar is coming, we drive less, turn off lights, change the thermostat a few degrees, what ever we can do to use less energy. This causes massive declines in the demand for oil, leading to declines in price.

The bottom line is that with supply around the world continuing to grow, a current supply glut in place, and growing economic concerns, oil isn’t looking great at the moment. In fact, the outlook is relatively grim. Because CHK makes its money through the commodity, the risk simply outweighs the reward, in my opinion.

Other Assets In The Sector That Have More Positive Outlook

If you want to invest in the basic materials sector, that’s great. There are other assets that will likely yield gains. If not, they won’t be as susceptible to the outlook mentioned above:

  • XOM – If you want to stay in the energy arena, one of the best places you can look is Exxon Mobil. While the company is at the mercy of oil to an extent, it is nowhere near as susceptible to the fluctuations of the commodity as CHK. This is the result of a refining business that covers declines caused by oil. All in all, XOM seems like a strong choice.
  • GEVO – Another place you might want to look is Gevo. The renewable fuels and chemicals company is setting itself up for big gains at the moment. With 2 commercial flights done using renewable jet fuel and plans with regard to isobutanol in gasoline blends, this stock has tremendous upside potential.
  • Precious Metals Stocks – You also may want to take a close look at precious metals stocks. Given current economic conditions, gold and silver are climbing dramatically. This is sending stocks like VGZ, ABX, and AG on strong upward trends. Even if you decided to stick with Chesapeake Energy, these stocks would provide a strong hedge for the losses that are likely to come.

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Monsanto Company MON Stock News

Monsanto Company (NYSE: MON)

Monsanto Company is having a strong day in the market today, and for good reason. The company was recently the subject of a takeover offer from Bayer AG. However, they declined the offer. Nonetheless, today, Bayer came up with a new offer – one that’s exciting investors. Today, we’ll talk about the takeover offer, how the market is reacting to the news, and what we can expect to see from MON moving forward. So, let’s get right to it…

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Bayer Increases MON Takeover Bid

As mentioned above, Monsanto is having a strong day in the market today after news that Bayer has made the decision to increase their offer to take over the company. The previous offer that was made was for a total of about $62 billion. This would work out to $122 per share. The goal there was an outright takeover.

Nonetheless, MON told Bayer that they would not take such an offer. Unfortunately for the German chemical company, the offer was simply considered to be too low. Ultimately, they wanted an offer that would fully capture the intrinsic value of the company.

This morning, we’ve heard news that Bayer has increased its offer to take over MON. The new offer, $125 per share, shows a strong commitment on Bayer’s side to make the takeover work. At this value, they believe that they are fully capturing the intrinsic value of the company.

Is The Takeover Going To Happen?

This is a big question, and it’s a very hard one to answer. The truth is that no one knows if Monsanto is going to decide to take this offer or reject it. However, in my opinion, this is another one that is likely to be turned down.

Considering the current price of MON shares, the new offer represents a premium of less than 30%. In this case, if a 30% premium was offered, the deal would likely go through. However, with the lower premium offered, I don’t see the acquisition happening.

At the end of the day, MON simply has too much going for it to be willing to accept anything but a top-of-the-line premium. In fact, this morning, the company announced that it was in talks with BASF SE. The goal of the talks is to purchase the German chemical maker’s agricultural solutions business. Ultimately, the company is doing well without the acquisition. So, for it to happen, it’s going to have to be a very, very good offer.

How The Market Is Reacting To the News

As investors, we know that the news moves the market. Any time positive news is released with regard to a publicly-traded company, we can expect to see gains. Negative news will lead to declines. In this particular case, the news that was released was overwhelmingly positive. So, naturally, we’re seeing gains in the value of the Monsanto shares. Currently (12:47), the stock is trading at $103.73 per share after a gain of $2.60 per share, or 2.57%, thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from MON stock. At the end of the day, the company is in the midst of a win/win situation. If it takes the offer, it will appease investors. However, the offer doesn’t seem like one the company will be willing to take at the moment. Nonetheless, Monsanto has plenty going for it when it comes to its product lineup, sales process, and overall business. All in all, the stock is likely headed for gains.

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Gevo GEVO Stock News

Gevo, Inc. (NASDAQ: GEVO)

Recently, we’ve seen a ton of investors calling for $3 a share on Gevo. I have to say, not only do I see this happening, butI think this growth will likely be the tip of the iceberg. I recently did an interview with Pat Gruber, the CEO of the company. It was incredibly fun talking with him, and we got tons of information. To read the interview, click here. When I planned the interview, the original plan was to write an analysis to be published with it. However, I got inundated with emails, phone calls, Tweets, and StockTwits messages. Everyone wanted the answers. So, I decided to publish the interview without an analysis in order to get the news out quickly. Nonetheless, I’ve had some time to review the interview and form my own opinion. With that said, I’m expecting big gains out of GEVO. Today, we’ll talk about why!

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Jet Fuel Could Send GEVO Through The Roof

For me, the most important part of the interview was when we started to talk about Alaska Airlines and what I perceived to be test flights. Through the interview, I learned that these weren’t test flights at all. In fact, they were commercial flights. More importantly, when I asked if more flights using Gevo jet fuel were to come, Pat said, “Yeah, they can fly any time, and they said they would!”

For me, this marks a pivotal point for GEVO and its investors. You see, with one airline flying using green fuels, chances are that its sales will grow. Sure, it will take some time to put together the marketing plans and other plans before regular flights start. Nonetheless, this will be positive for Alaska Air Group in the long run. As other airlines see the success, we’re likely to see more orders for green jet fuels, a market that Gevo has cornered! This could be a hugely profitable thing for the company.

Isobutanol Is Going To Take Off

When I announced that I would be doing the interview, I got a ton of questions about isobutanol. In fact, most of the calls that I got while I was preparing to publish it had to do with isobutanol. Investors wanted to know who Musket would be supplying it to, how production was going, and whether or not GEVO thought it could ramp up production.

During the interview, I learned that Pat was not at all concerned about being able to produce enough isobutanol to meet demand. In fact, he made it clear that there’s no need to look for R&D companies to help aid in production.

When it came to Musket, Gruber gave an interesting answer. I asked him if the company would be delivering gasoline/isobutanol blends to gas stations outside of Love’s. Of course, if this were the case, we could expect to see some big gains. Here’s what he had to say:

Musket, I think, distributes outside of their Love’s network. So, if you’re parsing it as Love’s is the retail side and Musket is the distributor side, I’m pretty sure Musket does more than just Love’s. [Jokingly] So, without answering, I answered.”

This answer suggests that isobutanol will be available outside of the Love’s network in due time. As a result, the audience for the product is now greatly expanded.

Delisting Is Off Of The Table

Another area where I was getting a ton of questions was delisting. GEVO investors wanted to know what the company was doing to avoid being delisted from the NASDAQ. While Pat couldn’t give me any plans, he did say that they would be dumb to let themselves get delisted. The reality is that there are so many options out there that delisting seemed to be the least of concerns for Pat and the team at GEVO.

The Bottom Line

The bottom line here is that Gevo is an incredible company. It has created green jet fuel that has already been used in commercial flights and will likely be used in more in the future. On top of that, isobutanol is set to take off. We’ve heard about the goose that lays golden eggs. Well, somehow GEVO has found this creature – twice! All in all, things are looking great for the company, and I’m expecting to see long-run gains.

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What Do You Think?

Where do you think GEVO is headed moving forward and why? Join the discussion at TalkTRENDZ from CNA Finance!

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Stone Energy SGY Stock News

Stone Energy Corporation (NYSE: SGY)

Stone Energy Corporation has had an explosive month. In fact, today alone, the stock is up by more than 30% and looks like it could continue running upward. However, if you’re a smart investor, you might want to consider taking your profits now! This thing looks like it’s going to drop – and soon! Today, we’ll talk about why we’ve seen such strong gains, why the stock is nowhere near worth what it’s trading for at the moment, and what we can expect to see from SGY moving forward.

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Why SGY Is Climbing So High

At this point, Stone Energy is up in a big way from recent lows. The reason for the gains are relatively simple. You see, back in May, the company explained that financial times were getting so rough that bankruptcy was not out of the question. That’s a heavy statement to make, and investors react to these sort of things. So, we saw massive declines on the stock.

Nonetheless, the company explored other options, as any company should. As a result, we watched as SGY borrowed an additional $385 million. This gave the company some cash to work with and allowed it to stay above water. At this point, any news other than bankruptcy would have been good news. So, investors cheered the company’s decision.

More recently, we’ve seen additional actions that SGY has taken in order to improve its finances. Now, investors are arguing that the stock was trading at such incredible lows that it had to move up. Nonetheless, at this point, the gains have gone far past realistic. This is being caused by nothing more than investor excitement.

Just Look At Today’s Gains

If you haven’t seen the growth in Stone Energy, just look at the stock today. Currently (1:16), the stock is trading at $23.54 per share after a gain of $5.84 per share, or 32.99%, so far today. What’s more, there has been no fundamental news that suggests we should be seeing this kind of growth.

This Stock Is Destined For Declines

While we have seen incredible gains in SGY recently, I believe that the best move to make would be to take your profits now. The truth is, I’m not alone in this belief. In fact, analysts project that the stock will make it to around $8.16 per share. So, at the moment, it is trading at nearly 200% more than analysts expect to see.

So, what’s the rub here? Well, the simple fact is that things really haven’t gotten better for SGY. The company is heavily dependent on oil. As a result, it has seen massive declines in profits. In fact, the company is operating at a loss. In the year 2015, that loss came to a total of $1.1 billion.

Now, when we compare the company’s earnings to its debts, a big picture starts to emerge. With no profits and more than $1.5 billion in total debts, Stone Energy will have to continue borrowing money to even pay its debts on time. That’s not good news my friends.

At the end of the day, the recent rally is the result of presumptions that the stock had been battered and didn’t deserve the declines. However, that’s not the case. At the end of the day, things are looking overwhelmingly bad for SGY and conditions are getting worse. As a short-term play, you made your money. Now, it’s time to consider abandoning the ship before the thing starts to sink!

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What Do You Think?

Where do you think SGY is headed moving forward and why? Join the discussion at TalkTRENDZ from CNA Finance!

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Gevo, Inc. GEVO Stock News

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Gevo, Inc. (NASDAQ: GEVO) Before we get into this interview, I'd like to extend a special thanks to my friend Joey who both set up the...