Ethanol shares due for gains: Barron's
Shares of Aventine Renewable Energy Holdings Inc, Pacific Ethanol Inc and VeraSun Energy Corp could reward investors over the next year as ethanol demand remains despite concerns about the fuel, Barron's reported on Sunday.
By Agencies |
NEW YORK: Shares of Aventine Renewable Energy Holdings Inc, Pacific Ethanol Inc and VeraSun Energy Corp could reward investors over the next year as ethanol demand remains despite concerns about the fuel, Barron's reported on Sunday.
Companies that produce the corn-based alcohol, which is used as a substitute for gasoline, have seen their shares fall amid criticisms that ethanol's use has caused a food shortage and that it is a wasteful way to fuel cars. But the companies still have strong support on Capitol Hill, which suggests they will continue to receive federal subsidies, said the news magazine on its Web site.
In addition, ethanol's lower cost relative to gasoline allows refiners and consumers to save money, Barron's said. The three stocks are trading below book value and all could rally in the coming year, according to Barron's. Aventine closed at $4.98 on Friday, while shares of Pacific Ethanol closed at $3.14. VeraSun closed at $5.58.
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