Pacific Ethanol Inc. (NASDAQ: PEIX) shares jumped nearly 65% on Thursday after fourth-quarter result beat estimates. On Friday, profit-taking set in; the shares were off around 6%.

What is not clear is if the forces that helped the company show a nice fourth-quarter profit can be sustained, or if there is a bubble in the shares of ethanol producers generally.

Pacific Ethanol’s ethanol is used in motor-vehicle fuels, with its primary customers in the western United States. Demand for the product has stabilized in the past year or so, helped by federal and state requirements that motor fuels use more than ethanol. Exports also are growing for the same reason. Brazil may boost its requirement that motor fuels include 27% ethanol from 25% now.

Meanwhile, corn prices — the key raw material for ethanol — have dropped some 50% and have stabilized. The company also makes ethanol from sugar beets, grain sorghum and even wine waste.

Pacific Ethanol nearly collapsed a few years ago from low demand and high corn prices. But it has been able to resume production at plants in Oregon, Idaho and California. The company announced this week it is reopening a fourth plant in Madera, Calif., mothballed since 2009.

Result: The shares are up more about 200% since the end of 2012, a whopping 500% since dropping to $2.33 in early November and even 171% since Dec. 31. They were trading at $13.65, down 8.6%, on Friday.

Investors seem to be buying into the ethanol story. Shares of Great Plains Renewable Energy Inc. (NASDAQ: GPRE) are also up more than 200% since 2012 and 70% since the end of October. Shares of The Andersons Inc. (NASDAQ: ANDE), another ethanol producer, are up 91% since the end of 2012.

So, let us know what you think in our poll, because we are interested in a public opinion on this matter.

[polldaddy poll=7838957]

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