VeraSun Energy Corporation: An a-maizing fuel
VeraSun Energy Corporation (NYSE: VSE)
Brookings, SD
http://www.verasun.net/
52-week low / high: $9.75 / $26.90
Shares Outstanding: 78.29 million
Market Capitalization: $1.02 billion
Mount Rushmore isn’t the only money-maker in South Dakota these days: VeraSun Energy Corporation (NYSE: VSE) has recently emerged from the state’s corn fields as a leader in the ethanol sphere.
Founded in 2001, the company is one of the largest producers of ethanol in the United States for use in E85 (85% ethanol and 15% gasoline) used in Flexible Fuel Vehicles (FFVs).
VeraSun Energy operates five ethanol production facilities (bio-refineries) with a combined capacity of 560 million gallons per year. Three additional facilities under construction will double capacity to one billion gallons per year by the end of 2008, the company estimates.
VeraSun also sells byproducts of the ethanol production process used as feed and is developing a process to extract oil from dried grains for use in biodiesel production.
In May 2005, VeraSun launched its proprietary brand VE85 and has secured distribution through more than 100 retail stations in 11 states and the District of Columbia. In August 2007, the company launched its product at 20 stations through an agreement with Kroger convenience stores.
Revenues for the quarter ended June 30, 2007 were $169.6 million, up 10.4% from $153.5 million in the same quarter, 2006. Analysts see 2007 as an energetic year for VeraSun, projecting revenues of $792.5 million, up 42% from $558.0 million in 2006. They are even more bullish about 2008, projecting sales of $1.77 billion (mean estimate), a 124% increase from the 2007 estimate. EPS is expected to be $0.36 in 2007 and $0.60 in 2008.
With Congress setting a goal in 2005 for 7.5 billion gallons of ethanol to be produced annually by 2012, investors should watch this stock. The growing demand for this biofuel could allow for farming more energy from your portfolio.
Note: VeraSun Energy Corporation (VSE) is on the “Watch List” of Growth Report, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, VeraSun Energy displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Growth Report portfolio at a later date.
