Oppenheimer has initiated coverage of the down and out US-ethanol sector, and the group was given a lackluster "Perform" rating.
"Perform" ratings have been assigned to Aventine Renewable Energy (NYSE: AVR), Pacific Ethanol (NASDAQ: PEIX), and VeraSun Energy (NYSE: VSE).
With most of these stocks down by two-thirds or more from their 52-week highs, this won’t help a beleaguered sector. If you watch SEC filings, you will have probably seen that Bill Gates’ Cascade fund has been selling more and more of those Pacific Ethanol positions (although he took most funds out long ago).
With the exception of the farmers and businesses that this is helping out, it becomes very difficult to find people who still believe the US-based ethanol program does any good other than helping boost the cost of agriculture.
As we have maintained: "If Iowa wasn’t the first state on the presidential election circus, ethanol would be handled far differently."
Jon C. Ogg
April 25, 2008