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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