Potential Ethanol Play

[wiseheart]

I heard on BBC News the day before yesterday that Bush
was going to make a speech about increasing ethanol funding.
I had already researched ethanol a bit, especially after last year's energy bill. Anyways, yesterday I bought some Verasun Energy shares (VSE) The fundamentals are decent, and profits are growing. Yet, there is a big risk, due to the rise in the price of corn, and the falling of oil prices.
Basically, Im betting that oil prices will go up again this summer, and that corn prices will remain fairly low. Plus, that consumers will continue to seek alternatives. Im not interested in an ethanol debate, I know the details, just passing along this suggestion.

[Chapter7]

I think you got in at a good price. VSE has had great earnings each of its last two quarters and the price has spiked up on each earnings release. Both times since, it has trended downwards on news that has anything to do with the company's financials, such as gas prices, corn prices, etc. I realize these factors do have an impact on VSE, but the company has yet to disappoint on its earnings. When they do, I will believe these depressed stock prices are warranted. Good timing on your purchase.

[pig4bill]

[ QUOTE ]
I heard on BBC News the day before yesterday that Bush
was going to make a speech about increasing ethanol funding.

[/ QUOTE ]

He said the same thing a year ago. Not exactly a surprise.

[wiseheart]

He said a different thing in last year's SoTU.

He called for further increases in ethanol funding.

Anyways, VSE has been down slightly, not sure exactly
why. It bounced around, going down, then up in after
hours, then back down. Like profit taking, big move in,
and then more profit taking? I don't really know.

[Girchuck]

If you are betting oil goes back up, why not just buy into oil directly, and forego that parlay that the corn stays flat as well?

[steelhouse]

I think biodiesel or electric will ultimately win out. biodiesel is more efficent than making ethanol.