Bioalkohol als Benzinersatz - Goldgrube oder Hype?

Maybe some day there'll be a plethora of time machine companies, all of which will gladly offer shares to investors to allow them to participate in jaw-dropping sales growth while also subsidizing company development costs and years of operating losses. Until that time, we'll have to settle for the developing investment craze of ethanol companies, which are capable of turning crops such as corn into an alternative fuel source -- kinda like that Cuisinart from Back to the Future.

The current craze

Part of the growing ethanol hype is yesterday's share offering of VeraSun (NYSE: VSE) to the public at $23. VeraSun is the second-largest producer of ethanol in the U.S. The company plans to use the stock proceeds to build more ethanol plants and expand market share. Imagine that. The stock opened at $28 and shot to $30 by the close of the market for a 30% gain on the day. Great Scott! No wonder investors want in on the action.

And shares of Archer Daniels Midland (NYSE: ADM) have nearly doubled this year as investors discovered it's the largest producer of ethanol in the United States. Soon-to-be-public companies include Aventis Renewable and Hawkeye Energy. There will be no shortage of ethanol IPOs as long as investors willingly snap up the shares.

The issues with ethanol

Clearly, there are merits to producing ethanol and using it as an alternative to oil-based gasoline. It would most definitely benefit domestic farmers with a huge new market to sell corn into. It would also reduce American dependence on oil from the geopolitically charged Middle East.

On the flipside, it's unclear whether ethanol is, or will be, more affordable than gasoline. The issue is further complicated by factors such as subsidies provided to ethanol producers and fluctuating oil prices. If oil were to return to $20 a barrel, for instance, SUVs [Sport Utility Vehicles - A.L.] might even revisit their heyday. There's also a rather critical debate as to whether more energy is actually expended to create ethanol than is spent using it as a fuel source. And what about concerns that ethanol might damage engines and clog up filters? In other words, there are quite a few issues yet to be worked out.

Berkshire Hathaway weighs in

There's no better illustration of these issues than a summary of Charlie Munger's and Warren Buffett's thoughts on the subject at the May annual Berkshire Hathaway (NYSE: BRKa) meeting in Omaha, courtesy of fellow Fool Rick Casterline's copious note-taking.

- INTERVIEW MIT BUFFETT -

Question: What is your opinion on the economics of ethanol as a fuel additive and as a potential investment? Should I be looking at that industry?

WB: Charlie and I don't know enough to answer that latter part. We've been approached many times, but we're trying to figure out the economics of an ethanol plant. It will depend on many factors, such as government policy and a lot of other variables we're not good at predicting. It's also a very hot area for investors right now, and our general experience is that we don't participate in things that are hot and easy to raise money for. I have a son who is head of the Ethanol Board in Nebraska. When he starts making more money than me, I'll reconsider. There's no question that usage will grow, but generally speaking, agricultural processing firms have not earned high ROICs. Look at Cargill, ADM. It has not been a great business. Ethanol could prove to be an exception, but I'm not sure how you gain a significant competitive advantage with any particular ethanol plant.

CM: My attitude is even more hostile than Warren's. I have just enough knowledge of thermodynamics left in me to suspect that it takes more fossil fuel energy than you can get out of ethanol, and that's a very stupid way to solve an energy problem. [Laughter]

[Diese These ist nach meiner Kenntnis falsch, die Energiebilanz ist leicht positiv - A.L.]

The Foolish bottom line

In summary, there will be a substantial amount of money made and lost by companies and investors alike as they wrangle over ethanol and its market potential. Cynicism aside, ethanol has promise. If the economics become compelling, the industry has the potential to greatly benefit oil-dependent domestic and international economies, as well as the environment. But from an investment perspective, until that promise develops, the Foolish investor would be wise to passively watch this one unfold from the sidelines.

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IPO auf Zickzack-Kurs: Verasun (VSE) - Emissionspreis: 23 Dollar - stieg gestern um 30 % bis auf 30 Dollar, gab aber schon 20 % davon wieder ab.

At the May 16 meeting of the Society for the Investigation of Recurring Events, Delos Smith, president and chief economist at Delos Smith & Associates, was particularly concerned about energy. In his view, the problem with energy is that global demand for crude oil has reached 85 million barrels a day and supplies are tight. With 235 million cars on the road, U.S. refineries are running at full capacity, and 40% of the output in the U.S. comes from two cities that could be hard hit during the hurricane season. Delos sees a big future in ethanol to solve our energy needs. Delos said that instead of paying farmers not to grow corn through subsidies, we should encourage it and build the facilities to convert it to ethanol, citing Brazil's successful use of sugar-based ethanol to reduce oil use.

My models show that Nymex crude oil peaked at $75.35 back on April 21 and has been trading sideways to down since then. Ethanol stocks have declined with crude oil, as the hype around oil's peak (and need for an oil replacement) has subsided. The weekly chart profile for crude oil is negative, with support this week at $66.43 and the five-week MMA at $70.34. My monthly and semiannual supports are $64.52 and $64.58, with quarterly resistance at $75.94. With crude oil likely to stay in an elevated trading range, I expect ethanol stocks should regain their energy.

My models indicate that investors will want to focus their research efforts on these four stocks:

Archer Daniels Midland (ADM:NYSE) rates a hold with ValuEngine and is 14.4% overvalued with fair value at $34.44. After reaching a high of $46.71 on May 11, ADM declined to $37.45 on June 13, testing my monthly value level of $37.94. If ADM can close above its 50-day simple moving average of $40.12, it has the possibility of rising to my weekly risky level at $43.89.

Given its buy rating from ValuEngine and the fact that it's trading below fair value, The Andersons (ANDE:Nasdaq) looks like an attractive addition to an alternative-energy portfolio, with shares above Tuesday's low of $70.01. The stock is currently 9.8% undervalued, with fair value at $81.08. The Andersons traded down to $70.01 on Tuesday after reaching a high of $125.40 on May 4. But given its volatile performance, a break to a new low could indicate risk to the 200-day simple moving average of $58.67, which is the next buy level.

MGP Ingredients (MGPI:Nasdaq) traded down to $20.01 on June 15 after a high of $36.08 on May 11. If it breaks to a new low for the move, it's likely to see downside is to its 200-day simple moving average of $16, which would make this ethanol play undervalued. Currently, MGP is 14.9% overvalued, with fair value at $18. My models show possible upside to my monthly risky level of $22.78. According to ValuEngine, the stock rates a hold.

Pacific Ethanol (PEIX:Nasdaq) is the most undervalued of my four picks, at 25.5% undervalued, with fair value at $28.14. At this level of discount, adding shares of Pacific Ethanol looks smart, particularly in anticipation of the stock rebounding to my monthly pivot of $25.43. The downside is to its 200-day simple moving average of $17.37, which is the next level that looks buyable. The stock is rated a hold according to ValuEngine and has traded down to $20.05 from a May 11 high of $44.50.

Another way to get exposure to this facet of alternative energy is to buy energy giants that are entering the sector. These companies have deep pockets and will join to compete for a major share in the development, production and delivery of alternative energy. For example, BP (BP:NYSE ADR) and DuPont (DD:NYSE) just announced a partnership to develop biofuels.

Perhaps the best way to play ethanol is to buy a farm in Iowa!

Hawkeye Holdings is still to come.

Although Aventine is a newcomer to the stock market, it features some familiar names as shareholders.

Metalmark, a private-equity firm established by former principals at Morgan Stanley Capital Partners (MS), owns a big stake in the company. CEO Ronald H. Miller, 57, has been with the company since 1981, serving in a number of positions before moving up to his current title in 2003.

In the three months ended March 31, Aventine said that net income doubled to $12.2 million on revenue of $314 million, compared with net income of $6.6 million on revenue of $197 million in the year-ago period.

Interest in ethanol has been high, given that it's seen as an alternative to crude oil.
Archer Daniels Midland Co. (ADM) is the largest ethanol producer in the U.S. with annual production of 1 billion gallons.

While tough market conditions are forcing some IPOs into discounting or pulling their deals entirely, the right offerings are catching strong interest.

Aventine marks the second IPO of the week with lofty pricing after J. Crew (JCG) rallied nearly 30% in its first day Wednesday. J. Crew fell 4 cents to $25.51 on Thursday...

Steve Gelsi is a reporter for MarketWatch in New York.

First, Aventine actually buys ethanol from one of its chief competitors, Vera Sun Energy (VSE:NYSE) , another top ethanol producer, which saw its share price surge 30% on its first day of trading back on June 15. Of the 529 million gallons of ethanol that were marketed and distributed by Aventine in 2005, 230 million gallons were bought from VeraSun.

This is staggering, and raises a bright red flag. VeraSun has announced it will terminate its marketing alliance with Aventine on March 31, 2007. Aventine believes that its deals with new alliance partners and an increase in the volume of purchase and resale activity can make up for the loss of VeraSun.

Second, according to the company's S-1 filing with the Securities and Exchange Commission, insiders sold 1.4 million shares on the offering. Insider selling is not uncommon during an IPO, but the number of Aventine shares being sold could be viewed as shady.

I believe the ethanol phenomenon will continue to dominate the headlines in the short term. However, based on the risks outlined, I would use caution in purchasing shares of Aventine for the long term. Archer Daniels Midland (ADM:NYSE) is a more conservative play on ethanol, and a much better company. It is the No. 1 ethanol producer (its biofuels division includes ethanol), yet ethanol only accounts for 19% of the company's operating profits.

NEW YORK (MarketWatch) -- Aventine Renewable (AVR) on Tuesday reiterated plans by shareholders to sell 21.2 million shares acquired in the company through a private equity placement. The shares in the shelf offering have a lockup of 60 days. The ethanol producer first filed the stock offering on March 31. The company held its initial public offering on June 29 at $43 a share. The shelf offering will raise about $830 million based on the company's closing price of $39.13 on Monday. Selling stockholders include Leslie Lee Alexander, Blue Ridge Capital, Canyon Value Realization Fund, Goldman Sachs, PEA Target Fund, Raytheon Company Master Pension Trust, Royal Bank of Canada and Windmill Master Fund, LP. (Clarifies that shares in offering are from shareholders.) End of Story

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Auszug aus einem Artikel in BUSINESS WEEK vom 17. Juli 2006

...TEPID WELCOME.  Soaring energy prices make Bard more optimistic about that sector. Still, it’s not easy money. Since its debut in late June, ethanol group Aventine Renewable Energy (AVR) has fallen almost 25%. The lackluster debut for Valero GP, which holds indirect ownership stakes in oil terminal and pipeline operations, came just as oil was hitting record highs. Upcoming energy offerings include EV Energy Partners and Atlas Pipeline Holdings.

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CHART DER ETHANOL-AKTIE AVENTINE (AVR):
AVR fiel nach der Erstemission Ende Juni um über 30 %.

Das Problem dabei ist, dass es leider noch keine entsprechenden Elektroautos gibt.
Aber auch zum Einsatz in Gasautos kann man Biomethan verwenden. Nur leider setzen sich diese derzeit auch noch nicht durch.

Ethanol hingegen kann sofort zum Benzin beigemischt werden und die Abhängigkeit vom Öl mindern.

Deshalb meine Aussage, dass Bioethanol kurzfristig Sinn macht sich aber langfrsitig aufgrund der geringen Energieausnutzung wohl nicht als der Hit erweisen wird.

Deshalb würde ich vom Investieren in diese Aktien abraten.
Besonders auch unter dem Gesichtspunkt, dass Öl derzeit wieder billiger wird und die Bioethanolherstellung doch recht kostenaufwendig ist.

Meiner Auffassung nach wird Öl die nächsten Jahre auch nicht dauerhaft sehr teuer sein da dies in allen Industriestaaten zu noch mehr Anstrenungungen zum Energiesparen und der Entwicklung alternativer Energien oder dem Einsatz von mehr Kernkraft und Kohle führen würde. Der Ölpreis wird sich daher vermutlch auf einem hohem Preis einpendeln, aber Horrorzenarien von über 100 $/Barrel sind allerhöchstens als kurzfristige Spitzen denkbar, der Durchschnittspreis wird sich weit darunter einpendeln.

Meine Meinug, aber es kann natürlich auch ganz anderes kommen.