Energy
Aventine Stands Alone In Ethanol on 52-Week Lows (AVR, PEIX, VSE, USBE)
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Aventine Renewable Energy Holdings, Inc (NYSE:AVR) is one of the names that seems to show up on the list of 52-week lows more often than it doesn’t. Today is a repeat of that instance. Aventine shares were downgraded at Soleil today pre-market from "Buy" to "Hold" and shares are down almost 4% today at $10.85, The trading range today is $10.61 to $11.25 and the trading range over the last 52-weeks is $11.20 to $26.49.
The company is one of the fuel-grade ethanol producers in the U.S., and it shows up on the 52-week lows list as frequently as Pacific Ethanol Inc. (NASDAQ:PEIX). The key difference is Aventine would fit the bill of many value screens based on its P/E ratio. Pacific Ethanol would not because its profitability is so much lower. But Aventine is expected to have a decline in earnings in 2008, so its "value term" may be somewhat voided out.
Soleil also downgraded VeraSun (NYSE:VSE) and US BioEnergy Corp. (NASDAQ:USBE) to "Sell" from "Hold" pre-market, but those shares are actually up on the day along with Pacific Ethanol.
While legislation is expected that may boost prices, ethanol is quite apolitical situation right now and man are on both sides of the argumentif ethanol as an industry in its state in the U.S. right now is profitable without a government subsidy and even if it is environmentally sound or helping in dependence on foreign oil. With 2008 being an election year and with Iowa out of the way early on, ethanol (and the stocks that live off it) may see even more volatility in 2008.
Jon C. Ogg is a partner in 24/7 Wall St.; he does not own securities in the companies he covers.
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