Gevo, Inc. (NASDAQ: GEVO)
Gevo has been an incredibly interesting stock to watch as of late, and for good reason. The company has released several updates, all of which have been positive. However, recently, we’ve seen downward movement on the stock. Nonetheless, I’m expecting that this one will become huge. Today, we’ll talk about why GEVO could become the next big thing.
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New Views On Fuel Could Give GEVO A Big Boost
Gevo is a company that, for lack of a better way to say it, has the right product at the right time. The company is focused on creating green fuels as well as other chemicals. The big value here is in renewable fuels. Think about it – the world is going green. Governments around the world are working to reduce their country’s carbon footprint on the planet.
When we look toward consumers and businesses, we’re seeing the same. At the moment, solar panel installations in new homes are outpacing natural gas installations for the first time in history. More and more businesses are working to go green. While solar panels aren’t going to directly affect GEVO or its products, the movement to green energy will.
These days, consumers all want to use the latest and greatest in green energy. Some are even willing to pay more for their energy to reduce their carbon footprint. GEVO seems to have unlocked the key to high performance – green fuels.
Airlines Could Lead To Huge Profits
We all know that Gevo fuels were recently tested in 2 Alaska Airlines flights. That’s huge news. Think about it – the renewable jet fuel had to make it through stringent regulations to even get to this point. While we haven’t heard the results of the test flights quite yet, given the regulatory process the fuel had to make it through, I’m expecting these test flights to yield positive results. This is where things get interesting.
At this point, there’s a strong chance that the Alaska Airlines tests went pretty well. If the reports from the tests show positive data, chances are that Alaska Airlines will start to fly a series of its passenger jets using GEVO fuels. In return, Alaska Airlines will be able to market itself as the first green airline.
The implications of this could be huge for both Alaska Airlines and, of course, GEVO. Think about it – being able to promote an airline as green will likely lead to increased sales for the airline. On the other end of the equation, to keep up this reputation, the airline would need to purchase more and more renewable jet fuel from Gevo. It’s a match made in heaven.
And it could mushroom even further from here. As other airlines notice the success of Alaska Airlines associated with green jet fuel, they will want to get their piece of the pie. To do so, they’ll likely head to GEVO and sign their own agreements. At the end of the day, if this test proves to be successful, it could also prove to be overwhelmingly profitable for all involved.
Off Road Product Applications
Aside from the incredible profits that Gevo could realize from the Alaska Airlines tests, there’s another reason to be bullish on the stock. The company recently signed an agreement for the use of its isobutanol in a gasoline blend.
The agreement was signed with Musket Corporation, a very important distributor in the Love’s Family of Companies. The new gasoline blend will be designed for the marine and off road markets, creating another area for GEVO to excel in. In a statement, Dr. Patrick Gruber, GEVO CEO, had the following to offer:
“We believe Musket is an excellent partner to expand the use of isobutanol in gasoline blends, as our isobutanol production at Luverne builds. Musket and Love’s are significant players in the fuel distribution and retail in the U.S., so they have great reach to get our isobutanol into the market…”
Where GEVO Is Headed From Here
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from Gevo. As mentioned in the beginning of this article, the company has the right product at the right time. With renewable jet fuel and an agreement surrounding isobutanol, GEVO is positioned to skyrocket.
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What Do You Think?
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