Home » Finance » Stock Market

High Flying Stock: Pacific Ethanol Inc.

Aug 17, 2007
Pacific Ethanol, Inc. is a publicly traded company (NASDAQ: PEIX) that is engaged in the development, production and marketing of renewable fuels in the United States. The company has five ethanol plans under construction on the West Coast with expected capacity of 200 million gallons. In addition, the company's wholly owned subsidiary is one of the largest marketers of ethanol and generated in excess of $82 million in sales last year.

To many investors, the whole concept of ethanol is new. Ethanol is a fuel additive that is commonly made from corn, but can also be made from wheat, barley, potatoes and other crops. In addition, new technologies are enabling the production of ethanol from corn stalks, grain straw, paper pulp and even municipal solid waste. The starch or sugar portion of the corn is fermented and then distilled into alcohol. Sounds like a new concept, but early versions of the first automobiles ever produced ran on gasoline or ethanol!

Since January, the stock of Pacific Ethanol, Inc. (NASDAQ: PEIX) has increased almost 400% and currently trades at a market valuation in excess of $1 billion. Why all the investor excitement?

Pacific Ethanol may be in the right place and at the right time for the following reasons:

a) Ethanol is a commercially viable fuel additive that is rapidly taking the place of a fuel additive which has been banned in many states.

b) Ethanol additives results in less pollution than existing gasoline.

c) Demand for ethanol has far exceeded the industries production capacity.

d) A large number of vehicles are already capable of using gasoline mixed with an ethanol additive, usually under a 10% ethanol / 90% gasoline mixture. In addition, many manufacturers have committed sharp increases in the production of vehicles that can take much higher percentages of ethanol.

e) The production of ethanol has been highly profitable.

f) Federal and State governments are rapidly moving towards the use of alternative fuels to reduce dependence on foreign oil.

g) The company has one of the strongest management teams and a very experienced board of directors.

h) The company has attracted significant funding, including approximately $84 million in preferred stock from Cascade Investment, LLC, which is owned by Bill Gates.

Historically, companies with strong management, access to necessary investment capital and with critical mass in a rapidly growing industry - are companies to watch very closely. We believe that the Pacific Ethanol is well positioned to capitalize from the production and marketing of ethanol and should be watched closely.
About the Author
Joel Arberman is the Managing Member of Stock Aware, LLC. We publish a free investment research and analysis newsletter and offer investor awareness services. Learn more at
StockAware.com
Rating:
Please Rate:
(Average: Not rated)
Views: 163
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Buying
    • Selling
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources